Business Case Study Managerial Accounting
Answer the following questions based off the attached case study:
A. based on the interviews and the data in the case, estimate the following:
1. The cost of processing cartons throughout the facilit
2. The cost ofentering electronics and manual customer orders
3.The cost of shipping cartons on comercial carriers
4. The cost per hour of desktop deliveries
B. Using this capacity cost rate infromation, caluculate the cost and profitabilitiy of the five orders in exhibit 6-10. What explains the variationin profitability across the fiver orders.
C. On the basis of your analysis, which acitions shoudJohn Malone take to improve Midwest’s profitiability? Include sugggestions for managing customers profitibility.
D. Suppose that currently, Midwest processes 40,000 manual orders per year , with a total of 200,000 line items entered and 30,000 electronix orders.
1. How much unused practical capacity does the company have?
2. If the company’s efforts to encourage customers who worder manually to change to electronic ordering results in 20,000 manual orders per year (100,000 line items entered) and 50,000 electronic orders, how many orders entery operations to the number of eompoyees, what will be the cost savings from the changes?
3. Returning to the original information in part d, if the company’s process improvement efforts result in 20% reduction in time to perform each of the three order entery activities, how manyorders etery operations will the company require? if order entery resources costs can be reduced in proportio to the number of employees, what will be the closest savings from the process improvoements?
