Decision Making Across the Organization
BYP1-1 Mismatch Manufacturing lodge specializes in producing fashion outfits.
On July 31, 2011, a tornado touched(p) down at its factory and general chest. The
inventories in the store and the factory were completely destroyed as was the
general office nearby. Next morning, through a c arful search of the fortuity site,
however, Ross Clarkson, the companys controller, and Catherine Harper, the woo
accountant, were able to recover a base part of manufacturing cost info for the current
month.
What a horrible experience, sighed Ross. And the blister part is that we may not
have enough records to use in filing an insurance claim.
It was terrible, replied Catherine. However, I managed to recover some of the
manufacturing cost data that I was works on yesterday afternoon. The data indicate
that our direct labor cost in July totaled $240,000 and that we had purchased $345,000
of earthy materials. Also, I recall that the amount of raw materials used for July was
$350,000. nevertheless Im not sure this information leave alone help. The rest of our records are blown
away.
Well, not exactly, said Ross. I was working on the year-to-date income statement
when the tornado warning was announced.
My recollection is that our sales in July were
$1,260,000 and our gross profit ratio has been 40% of sales. Also, I quite a little remember that our
cost of goods available for sale was $770,000 for July.
Maybe we fag work something out from this information! exclaimed Catherine.
My experience tells me that our manufacturing overhead is unremarkably 60% of direct
labor.
Hey, look what I just found, cried Catherine. Its a copy of this Junes balance sheet,
and it shows that our inventories as of June 30 are Finished goods $38,000, Work in
process $25,000, and Raw materials $19,000.
Super, yelled Ross. allows go work something out.
In order to level an insurance claim, Mismatch Company must determine...If you want to feature a full essay, order it on our website: Orderessay
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