CARAVAN COMPANY BERLIN
Managerial accounting deals with methods for recording, consolidating, evaluating and reporting costs. Look at the operations of Caravan Company Berlin and tell what cost information would be valuable to the managers of the company and how they should get it.
Caravan Company Berlin is starting to produce two models of caravans, 9 and 12 feet caravans that can be towed behind cars and is planning to sell caravans through dealers in North and South County. The production process comprises of designing and contracting for production of a cast for each size, applying fiberglass to the cast, curing and finishing the floor and walls and mounting the purchased accessories. Caravans can be manufacture at a pace of about 8 every day on each cast (1 shift) and a cast will make 2500 to 4500 caravans before wearing out.
There is a single foreman in each production department. One is the casting dptt and other is an assembly dptt. When the plant is working on 1 shift, there are 6 labor working in the casting dptt and 4 in the assembly dptt. Warehouse is run by one employee who is responsible for receiving and shipping operation and the clean-up crew consists of two men. There is only one engineer in the office staff who is responsible for caravan design and production method. Clerical duties including billing, payroll and payable are handled by four persons. Apart from it the staff office has one president and a sales manager. Monthly payroll is around £30,000 per month. Other salaries are about £12,500 per month. Raw material, bought in parts and cat depreciation for 325 caravans, 1 shift production every month, is about £54,000. Overheads per month when operations are underway at a single shift level are budgeted to be £17500, exclusive of salaries. Sales from 320 caravans would be around £116,000.
After looking into details of the company, answer the following
• What do you think which decisions might be taken by the managers of the company
• What type of cost information might be required for such decisions
• How that cost information could be obtained
Answers
Answer:
CARAVAN COMPANY BERLIN
Managerial accounting deals with methods for recording, consolidating, evaluating and reporting costs. Look at the operations of Caravan Company Berlin and tell what cost information would be valuable to the managers of the company and how they should get it.
Caravan Company Berlin is starting to produce two models of caravans, 9 and 12 feet caravans that can be towed behind cars and is planning to sell caravans through dealers in North and South County. The production process comprises of designing and contracting for production of a cast for each size, applying fiberglass to the cast, curing and finishing the floor and walls and mounting the purchased accessories. Caravans can be manufacture at a pace of about 8 every day on each cast (1 shift) and a cast will make 2500 to 4500 caravans before wearing out.
There is a single foreman in each production department. One is the casting dptt and other is an assembly dptt. When the plant is working on 1 shift, there are 6 labor working in the casting dptt and 4 in the assembly dptt. Warehouse is run by one employee who is responsible for receiving and shipping operation and the clean-up crew consists of two men. There is only one engineer in the office staff who is responsible for caravan design and production method. Clerical duties including billing, payroll and payable are handled by four persons. Apart from it the staff office has one president and a sales manager. Monthly payroll is around £30,000 per month. Other salaries are about £12,500 per month. Raw material, bought in parts and cat depreciation for 325 caravans, 1 shift production every month, is about £54,000. Overheads per month when operations are underway at a single shift level are budgeted to be £17500, exclusive of salaries. Sales from 320 caravans would be around £116,000.
After looking into details of the company, answer the following
• What do you think which decisions might be taken by the managers of the company
• What type of cost information might be required for such decisions
• How that cost information could be obtained