The first email is from jacob, the president of a new division that has been started in the south-east to manufacture customized electrical components. After the first two months he feels that his sales cost are out of control.
Respond to Andrew with a prescription for control systems that he can put into place to forecast, monitor and control sales expenses.
The second email is from Brenda the head of production. Brenda wants to purchase an offset press to print manuals instead of purchasing them from local print shops. In the past the life of a product was several years and changes were minor. Today the product life cycle is less than 6 months and manuals are developed concurrent to the productions startup.
What information will Brenda need to get the equipment approved in the capital budget?
Prepare responses for the emails from Andrew and Brenda.
Course Objectives:
Discuss the role of performance measures in an organization. Use effective communication techniques. Use capital budgeting to evaluate investment proposals.
Use cost-volume-profit analysis to evaluate the financial consequences of alternative decisions. Examine the various forms of responsibiltiy centers and control systems
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