Overhead per month when operating at the one shift level is

Reference no: EM13578082

The Breezy Boat Company manufactures two models of boats, nine and twelve foot sail boats, and sell the boats through dealers in the South and Mid-Atlantic states. The manufacturing process consists of designing and contracting for the manufacture of a mold for each size, applying fiberglass to the mold, curing and finishing the hull, and mounting the purchased hardware. Boats can be prroduced at the rate of about eight a day on each mold(one shift) and a mold will make 2,400 boats before it wears out.

The are two manufacturing departments, each with a foreman. Once is the molding department, which carries the boats through the finishing work in the hull; the other is assembly department, which installs the hardware and packs the mast, sail, and fittings ready for shipment.

When the plant is running one shift, there are six people working in the molding department and four in the assembly department; one person runs the warehouse with attached receiving and shipping operations, and there are two people in the clean-up crew. The office staff consists of one engineer who works on product design and production methods, the president, the sales manager, a production manager, and four people handling clerical duties including billing, payroll, and payables.

Monthly factor payroll is about $20,000 a month; other payroll comes to around $12,000 a month. Material, purchased parts, and depreciation for molds for 320 boats- one shift production for one month- is about $53,000. Overhead per month when operating at the one shift level is estimated to be $17,000, excluding payroll. sales revenue for 320 boats is around $115,000.

The President of Breezy Boat company needs better information in order to know his profit margin. He is hiring you, as his consultant, to analyze his costs and to give him information on how to keep track of this information in order to make better decisions and increase his profit. Make a list of the decisions or activities for which you would want to have cosy information. Decide how this information could be obtained.

Reference no: EM13578082

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