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Stewart Box Company 2nd March
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Stewart Box Company 2nd March

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Transcript

  • 1. Stewart Box Company Visit… http://www.mbappt.blogspot.com/
  • 2. Flow Of the Presentation
    • Brief Summary
    • Strategic Planning
    • Issues & Concerns
    • Answer 1
    • Answer 2
    • Answer 5
      • Strong Points
      • Suggestions
  • 3. SBC - Brief Summary
    • Well established packaging company manufacturing both paper cartons & boxes
    • Paperboard & carton industry- characterized by strong competition because of potential overcapacity in most plants
    • High quality products
    • Marketing of products within a radius of 500 miles from factory
  • 4.
    • Various costs like labour & factory oh costs were apportioned annually
    • Budget was prepared by each responsibility center head.
    • Pricing policy followed was flexible depending on competitive conditions & design work
    • Contribution pricing was also practiced on some occasions to keep mill busy
    • Company followed job costing method using standard costs
  • 5. Strategic Planning
    • Visionary outlook (larger space for warehouse)
    • NPV method for the purpose of capital acquisition
    • Purchase of new assets on periodic basis (eg. printing press)
    • Designing special boxes to customer specifications
    • Periodic review done on each facet of its operation ( Experts for Production)
  • 6.  
  • 7. ISSUES & CONCERNS
    • External Issues -
    • Paperboard & carton industry- characterized by strong competition because of potential overcapacity in most plants
    • Due to overcapacity, competition for large orders is particularly keen & price cutting is common
  • 8.
    • Internal Issues-
    • Only President, Vice President Marketing & Controller involved in discussing & finalizing sales estimates for Budgeting
    • Control system is based on the business units, not on the organizational structure. Difficult to pinpoint the source of the variances
    • Vague Distinction between task control and management control.
  • 9.
    • Job-costing requires fixed costs to be allocated to each job. If allocation incorrect then costing goes wrong & same will be passed on to customer or carton division
    • The products are marketed within a radius of 500 miles
  • 10.  
  • 11. Answer 1
    • Board Mill & Carton factory
    • (b) $ 724.34
    • (c) If inventory level in Dec varies then it will be difficult to determine the profits of carton factory as there is interdepartmental transfer
    • (d) $ 86(Dec.) & $ 760 for year 1993
    • (e) Above the standard level
  • 12.  
  • 13. Answer 2
    • $ 9416
    • (b) 16,847 – 830 = $ 16017
    • (c) $ 16847
  • 14. Answer 5
    • Strong Points –
    • Differential Pricing Policy
    • Customized Production
    • Meeting delivery deadlines
    • In-House Raw Material Supply
  • 15.
    • Factories are located near to each other, so transportation cost is also saved
    • Company has well establishes strategic planning & Periodic Reporting
    • Reporting system – exhibit 4 such that president can easily see which of his divisions are making money
  • 16. Suggestions…
    • Separate strategic tasks from functional tasks for better accountability & implementation
    • Periodic review of job cost to be allocated to labour & machine hour rate on frequent (monthly or quarterly) basis rather than yearly
    • Encourage sales force to tap other markets and new customers to fulfill volume requirement
    • Separate two manufacturing departments in order to allocate expenses related to sales, marketing, finance, HR

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