Case Solution The data provided in Exhibit 4 was very useful for the company as it determined the costs whichwere favorable and unfavorable to the costs structure and the foundation of new standard costing system introduced to the company.
Why is it important that Superior has an effective cost system? Hence selling the additional units of the is more profitable for the company in terms of meeting the cost criteria and break even as compared to productwhich cannot reach the breakeven or generate profits even after adding units more.
Product has the highest direct as well as indirect labor cost. Consequently, as Product is costing high andgenerating less revenue it should be immediately dropped in order to save company from further loss and inefficient use of resources.
The younger Harvey became president when Superior manufacturing case father died and had exercised full control until he hired Waters. New Management ecisions and noted that morale of Paul Harvey knew that during he had made several poor d the organization had suffered, apparently through lack of confidence in him.
Dropping the product line which does not make profits to the company such as Product should be dropped immediately and resources of respective products should be used efficiently.
Moreover, revenue generated from selling additionalunits would also result in profitability to the company for Product Superior Manufacturing Company faced a huge risk from declining prices for its most successful product.
He instructed the accounting department to provide detailed expenses and earnings statements by products and departments for see Exhibit 2.
Moreover, the overall growth of the company as well as per product growth of the company should be analyzed. In order to compete strongly in the market, company should forgo its remaining profit of the product in order to save its reputation against the competitors.
As it has been operating in a competitive market and facing loss from last few years, therefore, development of effective cost system is very important for the company to generate profits and facilitate company with growth and prosperity.
On the other hand, Product has higher labor cost in comparison with Product and it would not generate positive results despite of sellingextra units due to its higher costs implementation and lesser unit sales.
Therefore, by addingunits to its sales, the product would be able to generate revenue which would be enough to cover the costs. Superior Manufacturing Company Case Memo. Which product would you sell to this customer?
LinkedIn Superior Manufacturing Co. This is just a sample partial case solution. At the time of the case, Superior used three dedicated factories to produce their products. The two men came to a clear understanding that Waters, as general manager, had full authority to execute any changes he desired.
Therefore, it is very important for the further establishment of the company to make effective decision which is favorable itself and for its future.
All of the sales force, on a salary basis, sold the three products but in varying proportions. The manufacturing strategy and cost system used by Superior does not clearly differentiate indirect costs associated with each factory.Superior Manufacturing CompanyMarshawn Pettes 12/18/ MBA Problem Statement Superior Manufacturing Company suffered a net l.
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Superior Manufacturing Co. Case Solution, Management needs to extract product line decisions for relevant cost data from the cost structure of the company billing system. A rewritten version of an. Join overlaw students who have used Quimbee to achieve academic success in law school through expert-written outlines, a massive bank of case briefs, engaging video lessons, comprehensive practice exams with model answers, and practice questions.
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Sign In Register. Access to case studies expires six months after purchase date. Publication Date: July 15, Superior Manufacturing Company Analysis Key Points:? Superior Manufacturing Company faced a huge risk from declining prices for its most successful product.Download