Of these, 75,000 cartons were shipped by commercial freight. Each driver worked about 1,500 hours per year doing the desktop delivery service. Midwest had leased four trucks and hired four drivers for the desktop delivery service. However, it was given a bumpy ride when it began to penetrate the market in Asia. Neither managers nor Associates have any idea about how the talent practices work.
John Knight Midwest Office Products Case The content of this essay describes the case study analysis of the Midwest Office Products company. Manual costs consist of both entering basic information and an additional cost for each line item. . The order entry expenses included the data processing system, the data entry operators, and supervisors. The cost of entering electronic and manual customer orders Here, the cost is entirely based on personnel costs.
Words: 678 - Pages: 3. Beyond that, the only thing that really matters is how many order lines I have to enter. The cost per hour for desktop deliveries iii. The electronic entry has a single cost. Rewritten version of the previous case. The cost of 3 a Using the activity based cost approach and the cost driver information in question 1. Include suggestions for managing customer profitability.
Estimated time required for employees to perform each type of task manual vs. We are partnered with the leading suppliers of technology in the industry -- Sharp and Oki. From Maine to Texas and New York to San Francisco, we have you covered with our Express Delivery. The cost of processing cartons through the facility i. If order entry resource costs can be reduced in proportion to the number of employees, what will be the cost savings from the process improvements? Several customers had switched to this electronic service because of the convenience to them.
It priced products to its end-use customers by first marking up the purchased product cost by 16% to cover the cost of warehousing, order processing, and freight; then it add ed another 6% markup to cover the general, selling, and administrative expenses, plus an allowance for profit. The cost of entering electronic and manual customer orders These costs are based on personnel costs. Additionally, the company increased investment in advertising, marketing intelligence, consumer research and product innovation. The cost of entering electronic and manual customer orders Here, the cost is entirely based on personnel costs. Malone was concerned that even after introducing innovations such as desktop delivery and electronic order entry, the company could not earn a profit.
Based on the interviews and data in the case, estimate: a. For instance, all orders include both desktop delivery expense and freight expense, when only one of those delivery methods are utilized. Allied has a total of 13 distribution centers thus giving them an increase in the services. That, paired with the fact that there are high overhead costs related to the desktop delivery option, also tells the reader that an incorrect accounting system is currently being used. Words: 1355 - Pages: 6. If order entry resource costs can be reduced in proportion to the number of employees, what will be the cost savings from the changes? Call or email us to get the ball rolling. The cost of processing cartons through the facility The two costs of processing cartons through the facility are warehouse costs and warehouse personnel costs.
Words: 3912 - Pages: 16. It uses multiple cost drivers volume and non-volume based cost drivers to assign overhead costs. Currently, there is no difference in the way that the size of orders are priced. A rewritten version of an earlier case. This ate up all the margin in the deal leaving nothing left for profit. We are partnered with the leading suppliers of technology in the industry -- Sharp and Oki. The first is the cost per hour of staff carrying out multiple tasks, such as order-entry operators and delivery personnel, desktop supplies.
Manual costs consist of both i entering basic information, and ii an additional cost for each line item. Only charge a small price premium up to additional 2% markup to the new desk top delivery. Each line item on the order has to be entered separately. Include suggestions for managing customer profitability. Both of these are proportional to the number of cartons.
Based on the interviews and data in the case, estimate: a. Below, I have calculated the profitability that breaks out the cost of both late payments and different delivery mechanisms. Below, I have calculated the profitability that breaks out the cost of both late payments and different delivery mechanisms. Manual costs consist of both entering basic information and an additional cost for each line item. Call or email us to get the ball rolling. A rewritten version of an earlier case.
They sold new and used cars, had a parts and service department, and was also involved in rental and leased vehicles. The company offers a comprehensive product line ranging from simple writing implements such as pens, pencils, and markers and fasteners to specialty paper for modern high- speed copiers and printers. So the total handling cost need to be allocated by the number of cartons processed in year 2000, which is 80,000 cartons. So we need to use activity-based cost system to chose different cost drives and allocate costs based on the activity. Words: 619 - Pages: 3.