Two production plants-identify benchmarks

Assignment Help Financial Management

Reference no: EM13813376

El Dorado Company has two production plants. Recently, the company conducted an ABM study to determine the cost of activities involved in processing orders for parts at each of the plants. How might an operations manager use this information to manage the cost of processing orders?

Set up an ABC costing system

Identify benchmarks

Compare the cost to process an order at each plant and the nature of the orders to determine if costs are out of control. If out of control, investigate

Close down the plant with the highest cost to increase profits

Reference no: EM13813376

Questions Cloud

Considering new project-net present value of the project : Lucky Inc is considering a new project. The project will generate revenues of $16 million and operating costs of $9,000,000 annually for the next 5 years. Interest expense is $1,000,000 per year. What is the net present value of the project?

Bonds make semi annual payments : Ngata Corp. issued 16-year bonds 2 years ago at a coupon rate of 9.5 percent. The bonds make semi annual payments. If these bonds currently sell for 99 percent of par value, what is the YTM?

Prepare a new contribution format income statement : Miller Company’s most recent contribution format income statement-The number of units sold increases by 13%. The selling price decreases by $1.50 per unit, and the number of units sold increases by 23%. The selling price increases by $1.50 per unit, ..

Customers regarding satisfaction and brand awareness : Each year, Sunshine Motos surveys 7,500 former and prospective customers regarding satisfaction and brand awareness. For the current year, the company is considering outsourcing the survey to Global Associates, who have offered to conduct the survey ..

Two production plants-identify benchmarks : El Dorado Company has two production plants. Recently, the company conducted an ABM study to determine the cost of activities involved in processing orders for parts at each of the plants. How might an operations manager use this information to manag..

An investment project costs : An investment project costs $15,000 and has annual cash flows of $3,800 for six years. What is the discounted payback period if the discount rate is 0 percent? What if the discount rate is 10%? If it is 15%? (Please show math)

Discuss the elements of zero-base budgeting : Discuss the elements of zero-base budgeting. How does it work? What are the advantages and disadvantages of zero-base budgeting? Provide a real-life example of a user of this type of budgeting.

Distinguish between the types of bonds : Distinguish between the types of bonds. What factors determine their value? Explain three important relationships that exist in bond valuation. Distinguish between preferred stock and common stock. Compare valuing preferred stock and common stock.

Common stock-risk-free rate and market return : King Farm Manufacturing Company’s common stock has a beta of 0.61. If the risk-free rate is 3.44%, and the market return is 5.95 %, calculate the required return on King Farm Manufacturing Company’s stock.

User Account

All Pages