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Japans Economic Malaise Analysis

764 words - 4 pages

Business Brief

Portal Corporation has two plants located in Utah, one in Ogden and the other in Sandy. The company produces laser printers. (Datar & Schoenebeck, 2014, p. 111) Currently, the company is operating under normal capacity at a rate of 240 days annually. In 2012, Portal Corporation is forecasting to produce 120,000 units of laser printers which will exceed the company’s normal production usage capacity to 300 days per year. This will require the company to pay overtime for their workers thus it will increase the variable costs per unit for Ogden by $5.00 per unit and Sandy by $10.00 per unit. The question here is how we spread the 120,000 units between Ogden and Sandy? ...view middle of the document...

If we chose to go with this particular plan the company will have a net income of $270,000.00

References:

Datar & Schoenebeck (2014). Franklin University (Managerial Accounting/Interpreting and Analyzing Financial Statements). Boston: Pearson Prentice Hall

5-Step Critical Thinking Decision-Making Process Matrix
Step 1: Identify the problem(s) and uncertainties.
What exactly is the problem…
The problem is which plant (Ogden or Sandy) should produce the additional 60 days (300max cap. -240 normal capacity) to operate at full capacity. |

The problem is this …
Repeating the above statement |

This is an important problem because…
It will have an impact of the total company’s operating income. |

The key question(s) that needs to be answered to solve this problem is…
Which site has more contribution margin per unit. |

Step 2: Obtain information.
The following information is needed to answer this question…
CMU for each plant is?Production rate per day for each plant is?The additional cost per unit for each plant is? |

Some important assumptions I am using in my thinking are…
CMU for Ogden is more than Sandy but the operating income per unit for Sandy is more then Ogden. |

The points of view relevant to this problem belong...

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