BMW Product inovation Essay Example

BMW Product inovation Essay Example BMW Product inovation Essay BMW Product inovation Essay BMW needs to assault the little Lifestyle vehicle advertise hole. This hole has clients, for example, youthful experts with a high discretionary cashflow. BMW has constrained restriction, and as such there is a huge utilization hole, which implies there is acceptable potential for high deals. This market hole has the potential for giving BMW the development it is making progress toward. BMW should focus on this hole utilizing the Mini brand, as the Mini has the correct picture dissimilar to any BMW marked items. The primary dangers for BMW are its constrained information available part, and its restricted money related assets. The principle area adversaries of BMW, Mercedes and Volkswagon (Smart and Beetle), both have more part experience and more noteworthy monetary asset. These adversaries will at the same time endeavor to out-value the Mini, and create substitution items. The center built up results of BMW, the 3, 5, and 7 Series, give a steady income, enough to create and present substitution models. BMW is anyway a goal-oriented organization and needs to develop. To do this BMW has been extending its portfolio and assaulting new markets, an unsafe, yet productive technique. This technique started with the dispatch of the Z3 sports vehicle, and all the more as of late the Z8 sports vehicle and X5 44 vehicle. The most recent phase of this system is the dispatch of the Mini brand. BMW has not delivered a little, moderate, way of life vehicle since the times of the air pocket vehicle. The presentation of the smaller than normal range is the most unsafe of all BMWs techniques for development. BMWs capacity to infuse character, unusualness, and fun into the Mini is the enormous hazard. BMW is a not only an organization, it is a brand. The BMW brand makes cars based on designing exactness, producing greatness, and being German. As the adverts disclose to every one of us, a BMW is The Ultimate Driving Machine. The Mini is likewise a brand. The Mini brand is based on character, erraticism, and being British. BMW can't simply re-identification, re-designer and exchange the brand as the BMW Mini. The very intrigue of the Mini brand would be lost. Colossal media and open intrigue welcomed the dispatch of the Mini1, the primary model to be discharged. The Mini Cooper, maybe the model most extraordinarily connected with the brand, is destined to be propelled, and it is this model will maybe decide the achievement of the item extend. BMW is a multi-item, worldwide assembling organization. The BMW marque is entrenched as a producer of great cars. To expand the exhibition of the organization, its items should be assessed and arranged in order to conclude whether to contribute, hold, or pull back help from them. These are vital choices, and are made by the data got from the investigation of the organization portfolio. The devices that will be utilized in the portfolio examination and the executives are as per the following: * Product lifecycle investigation * Boston Consulting Group Growth-Share Matrix * General Electric Multifactor Matrix These are for the most part adaptable devices that can be utilized to break down the two items and brands. The initial step is to investigate BMWs item portfolio. BMW has a scope of items, some at present available, and some anticipating dispatch (Mini CooperS). The following is a cluster indicating BMWs current item portfolio, this will frame the premise of the investigation of BMWs current and future market. The cluster above depicts BMWs current portfolio as far as the items themselves, however shouldn't something be said about the business sectors. Every item follows the item lifecycle, each will be at an alternate phase of that cycle, and each will have diverse market qualities. In spite of the fact that it is appealing to include all the items inside a portfolio at the pinnacle of their deals simultaneously, this makes issues. BMW knows the significance of ensuring that not the entirety of its items are at development on the double, as this may bring about the items starting to decay simultaneously. It is obvious from the time scale outline over, that BMW has stunned the lifecycles of three items. These are the 3, 5, and 7 Series cantinas. This stunning not just assists with guaranteeing an increasingly consistent pay, yet in addition takes into account the advancement of substitution items, for example, the impending substitution of the 7 Series. BMW has additionally been growing its portfolio as of late and this can be seen by the nearness of some new item dispatches over the most recent couple of years. The Mini being the latest, and the Mini Cooper still to be propelled. So as to arrange BMWs items, an examination of the portfolio is required. The principal defined, and most straightforward is the Boston Consulting Group Growth-Share Matrix. The Boston Matrix appeared over the page comprises of four quadrants got from Market Growth rate and Market Share. Market development rate is the vertical hub of the lattice. This shows the yearly development pace of the market division in which every item falls, and can be utilized as an intermediary for Market engaging quality. Piece of the overall industry is the even hub of the network. This shows the Market portion of every item comparative with its greatest rival. The Boston Consulting bunch contended that the income created by an item is dependant on which quadrant the item falls in. BMW has a genuinely settled arrangement of items. Every item is progressively a group of somewhat various models, fluctuating by determination. The BMW 3 Series is put inside an exceptionally jam-packed segment of the vehicle business; the Luxury little cantina. The 5 and 7 Series are bigger and more costly cantinas than the 3 arrangement, and are put inside somewhat less unstable segments of the market. The 3 Series is situated just underneath the Star, in the Cash Cow quadrant in the framework. The current 3 Series model is a market head in a develop advertise area. Its high piece of the overall industry prompts a high income rate, and its situation in a develop advertise implies that venture support in regions such an item and procedure improvement is low. The 5 arrangement as well, is easily situated as a Cash Cow. It is an adult item, put and sold in a less unpredictable market than the 3 arrangement. This implies the 3 and 5 arrangement group of items have amazingly high benefit, because of their significant level of deals, and the low degree of consumption expected to keep up the business levels. The 7 arrangement anyway is a model in decrease as far as its lifecycle. It is found at a definitive goal everything being equal, a pet. The item has piece of the pie, however its allure is winding down and its presentation comparative with its rivals isn't what it used to be. The market for the 7 arrangement nonetheless, is as yet performing admirably. This implies BMW should, and will audit the model with a view to re-dispatch sooner rather than later. The above items are for the most part genuinely settled. A considerable lot of them have been being fabricated for a long time now with a few re-structures and re-dispatches. BMW has anyway as of late started extending its portfolio, and the aftereffect of this is some new star and issue kids. One of these stars is the X5. The X5 is another market zone for BMW. The 44 market can be incredibly beneficial, particularly the On-street 44 items. This market is enormous and developing, and BMW have made an endeavor to get a cut of the cake with the X5. The Z3 and Z8 are fundamentally the same as items. They are both little games vehicles, varying in the Boston Matrix regarding piece of the overall industry and cost. The Z3 is a star, however the Z8 could be depicted a difficult kid. More reasonably valued than the Z8, and with a bigger portion of the developing business sector, the Z3 is an item starting to develop and produce a decent positive income. The Z8 anyway has a little portion of a similar market. This isn't expected to overpricing, or terrible showing. It is on the grounds that BMW has made the stride of intentionally restricting creation to guarantee a significant level of distinction and attractive quality for the item. For what reason do this? The Z8 could be portrayed as an activity in promoting itself. It isn't tied in with making benefit for the organization as far as immediate deals, however about bringing issues to light of the BMW brand and the qualities BMW needs its clients to accept the brand represents. Indeed, even the arrangement of this item in an ongoing James Bond film repeats this point. An energizing, nonchalant character, utilizing a BMW during his innovation pressed undertakings. These are for the most part qualities of the brand that BMW need to engrave upon the mind of its clients. The second accessible apparatus is the General Electric Multifactor Matrix. Items are assessed as far as Competitive Position and Market Attraction. This network shows all the more plainly how the built up 3, 5, and 7 Series are performing. The 3 Series has a huge portion of an enormous, alluring business sector. Its serious position is likewise solid. The short bolt shows that it is just moving from this position gradually, it is keeping up its position. This emphasizes the portrayal of the 3 Series as a Cash Cow. The 5 Series is additionally in a comparative position, if debilitating all the more rapidly. The 7 Series be that as it may, is distinctive to the past two models. It has a nearly little portion of a less alluring business sector. The long bolt shows that the seriousness of this item is decreasing quickly and it is quick turning into a Pet. By and by the inevitable re-dispatch of the 7 Series affirms this examination, and BMW will trust it goes some approach to improving the situation of this item. The more as of late propelled, new items can by and large be found to one side of the fundamental three BMW items. Except for the Z3, their serious positions are still genuinely feeble, however each of the three have great market appeal. This is coherent; as BMW would not have propelled items into business sectors it considers to be ugly. They show the attributes of difficult as recently presented items finding their feet in the market. The accentuation of item portfolio examination is the administration of existing items to amplify their qualities. BMW likewise needs to search for new items a

Internship report Essay Example | Topics and Well Written Essays - 4250 words

Entry level position report - Essay Example During this gathering, the part associations evaluate the overall idea of their activities, set the needs and choose of their joint procedure for the coming 3 years, quite by choosing the International Board. The International Board is involved 22 chosen individuals (a president, treasurer, 15 VPs, and 5 secretaries general) speaking to all locales of the world. This International Board characterizes explicit systems to execute the topical and provincial needs received by the Congress. It additionally meets 3 times each year to talk about the FIDH's political and vital direction and to affirm the spending plan. The Executive Board is made out of the President, the Treasurer and 5 secretaries General. It is liable for the administration of the FIDH every day and gathers once per month to take choice on current concerns and solicitation put together by part associations. The International Secretariat, situated in Paris, utilizes 30 lasting staff individuals who do different obligations including working at the base camp, going about as a changeless assignment before IGOs (intergovernmental associations) and working in local workplaces. It actualizes choices taken by the International and Executive sheets related to the part associations. ... The International Secretariat, Observatory and Specialist Desks. The International Secretariat is partitioned into locales (Africa Desk, Americas Desk, Asia Desk, Eastern Europe and Central Asia Desk, North Africa and Middle East work area) and is liable for setting needs. Since 2009, the FIDH singled out specific territories of prime worry, for which it has decided activity needs. These include: assurance for human rights protectors, responsibility, regard for human rights with regards to globalization, barrier of human rights, and regard for human rights with regards to counter-psychological warfare. The topical division of the International Secretariat mirrors the accompanying activity needs: Globalization and Human Rights Desk, Women's and Migrants Rights Desk, International Justice Desk, Observatory for the Protection of Human Rights Defender (hereinafter The Observatory). The Observatory (a joint program with the World Organization Against Torture) looks for the execution of th e UN Declaration on Human Rights Defenders and battles for the appropriation of new instruments planned for strengthening their insurance and security. It additionally gives crisis security to human rights safeguards on the ground under the type of material help, preliminary perception missions, media inclusion, and critical mediation. The International Justice Desk's order is to handle the issue of exemption for the individuals who complete human rights mishandles, and to make such people and gatherings responsible for their wrongdoings against humankind. It does as such by offering lawful and legal help to casualties of global violations by starting or taking part in prosecution before national, provincial and universal courts. The battle against exemption is one of the raisons d’etre

Is Modern Art Really Art? Essay

Dead creatures, elephant waste, unmade beds and rice all appear as though regular items yet would it be advisable for us to call them craftsmanship? At the point when we were growing up we were trained that craftsmanship was a lovely painting †like Van Gogh’s Sunflowers, or an ideal figure of a human †like Michelangelo’s David, however we were never truly encouraged that theoretical and contemporary workmanship were ‘proper’ types of craftsmanship, despite the fact that it was set up in the sixties. It made us think and challenge our own suppositions of what craftsmanship should resemble. Individuals didn’t comprehend bovines cut down the middle (Damien Hirst), wire work storage spaces (Mona Hatoum), rubble (Richard Long) or trash (Tomoko Takahashi) being called craftsmanship except if you could outline it pleasantly on your lounge divider. The way that this sort of craftsmanship didn’t fit conveniently into people’s thoughts of what workmanship ought to be was the explanation it was called ‘conceptual’. Applied and contemporary workmanship got an immense response out of individuals since they felt conned and insignificantly humiliated when, for instance, they took a gander at Martin Creed’s light going on and off and ‘didn’t get it’. They didn’t like the way that they couldn’t work out the genuine significance of what the craftsman was attempting to get over. It likewise got a response for another explanation which was the straightforwardness of a portion of the ‘art’. I’m sure that when all the individuals who were working extended periods of time each week took a gander at the generously compensated craftsman Tracey Emin’s unmade bed they were frantically shouting to themselves, â€Å"BUT I COULD DO THAT!† and thinking whether reasonable workmanship is even worth taking a gander at. Perhaps a few of us are totally overlooking what's really important they are attempting to get over. Perhaps as opposed to suffocating in the downturn of how simple, and maybe silly, the craftsmanship is we ought to be new peered toward and receptive and praise the way that these thoughts and possibilites have been opened for us. Perhaps that’s the point. This workmanship unquestionably has innovation and stun esteem. Specialists don’t need toâ repeat whats been done before similarly nobody needs to hear old jokes. Their utilization of new innovation adds to the nature of a portion of their work. Utilizing a PC isn’t a cop-out of drawing, it’s simply one more device. The creativity and stun esteem go connected at the hip and afterall, aren’t those the two things we need when we take a gander at workmanship? We as watchers don’t need to remain there taking a gander at something so dull, boring and misrepresented; If we needed that then we could simply stick a cut of bread on the divider and call that craftsmanship. The craftsmen search for new difficulties and ways for us to see their specialty. This kind of workmanship makes us challenge ourselves to discover magnificence in the regular things throughout everyday life. My assessment of Modern Art is an extremely adjusted one in light of the fact that despite the fact that a portion of the instances of theoretical and contemporary craftsmanship are now and again strange, they likewise challenge you to locate the genuine importance of a big motivator for it. The stun factor aswell spellbinds us and keeps our consideration bolted on the excellence of the craftsmanship. One thing that intrigues me however is that if craftsman Chris Ofili paints with elephant compost he is viewed as a Turner Prize winning virtuoso, yet in the event that I attempted to paint with elephant waste would I be viewed as a masterful virtuoso? Presumably not.

Essay Topics - An Overview

Essay Topics - An OverviewYou may have heard of essay topics before, but what are they? An essay topic is the main ideas or content of an essay. It is the overarching theme of the essay.It is the main ideas that form the focus of the essay, giving the essay its main weight. Essay topics may be about history, literature, politics, nature, culture, religion, and many more. It is the topic that we should establish as the backbone of the essay. An essay that is filled with great and well-written material should not have just one theme.For most of us, we don't want to write essays with topics that are out of the norm. An essay with well-written and intellectually stimulating content but packed with topics and essays are not necessarily a good essay. Thus, essay topics have to be chosen carefully. After all, there will be other students who will be competing for the same paper.Some people choose topics that are more conventional. If you are aiming to appear in that class or in that categor y, then the conventional categories like religion, politics, and more are your best bet. However, it is advisable that you keep out of the boundaries of common topics. Essay topics should be interesting and can greatly benefit your career in the future. For that reason, you should always be thinking about subjects that are unique.In choosing an interesting and unique topic, it is better to consider the way you can write the content. Consider its nature and substance. Choose topics that are controversial subjects can provide a solid idea for an essay. They are easy to relate to and, therefore, can provide knowledge that can shed light on people. Essay topics should be those that can open your mind. Essay topics should give you the extra leeway to come up with your own opinions.After you have decided your essay topics, write them. Make sure that you have put the full attention to your topic. You can search the Internet for different types of topics. Some of them might appear to be vag ue and boring. On the other hand, there are also topics that can truly spark ideas and thoughts that can be picked up. Make sure that you have reviewed the essay topic carefully before you write.Writing your essay topic with an eye towards learning and interest will surely help you in writing the best essay ever. Make sure that you have selected a topic that you have all to yourself and that you can write it in any way you want.

Does the Final Chapter of Brontes Jane Eyre Fit with the...

The final chapter’s of Bronte’s Jane Eyre have been a subject of discussion since it’s first publication. Many say the the ending does not fit and other argue that it does. There is a lot of evidence pointing to the latter. The conclusion reveals the fate of Mr. Rochester and Jane, Adele, and of St. John. All of the endings, a mixture of both happy and tragic, to fit with the entire story and can explained because of the Victorian era. This essay will argue that the conclusion of this novel, more specifically that Jane does go back to Mr. Rochester, is extremely fitting to both the plot and the essence of the novel. Many people have an issue with the ending because of the fate of Mr. Rochester. They feel him being disfigured and blind is†¦show more content†¦Jane still has her independence even though she goes back to him. Not only does the relationship even out, the biggest way Jane keeps her independence and her character traits is that she chooses to go back to Rochester. She sets aside her brain and uses her heart fully in making the decision. â€Å"It was my time to assume ascendency. My powers were in play and in force,† (301). She went back to Rochester and married him because she wanted to. She did not need to marry Rochester for his money or his social status, she married him because she wanted to. One of the biggest themes of Jane Eyre is the ideal woman and the struggle between choosing to be passionate or suppressing it. At the very end, it is most fitting for the character to develop in such a way that she chooses to be passionate. During the time of the novel as well, women were meant to suppress their wants and desires but the novel is very ahead of it’s time. It’s showing that it is perfectly alright to marry for love and marriage won’t make you lose your independence. The happy ending for Mr. Rochester and Jane are not the only fitting thing about the ending. Adà ¨le’s fate is al so very fitting for the plot and the English Victorian era. There was always a parallel between little Adà ¨le and Jane when she was younger. Both were orphans, and both were eventually sent away to a terribly run school. It would only make sense, that Jane, having gone through this, would

A Modern Adaptation Of Homer s Odyssey Essay - 933 Words

A modern adaptation of Homer s Odyssey – one of the most widely read ancient literary works in the world – Margaret Atwood s novella, The Penelopiad, retells this classic story, this time from the perspective of Penelope, Odysseus wife, who spent ten long years waiting faithfully for him to return form the Trojan war, and is now lameting her life from the greek underworld, Hades. The Penelopiad deconstructs the portrayal of penelope in the Odyssey, showing that instead of waiting and wasting away, she instead employed her wits, feminine charm and strength of character to build a strong empire and achieve her own ends, or at least, that s what she would like us to believe. Chapter 26 is a courtroom scene, where Odysseus is on trial for the hanging of the 12 maids, which he justifies by convincing the judge of their supposed indescretions. Atwood employs various literary devices, such as the exploitation of genre and dark humour, to convey the double standard between gen ders, the failures of the justice system, and the lack of consequences awarded to those in power. One of the most obvious themes in this chapter is how much the justice system failed the maids, who were, in essence, innocent. Having been raped by the suitors, the fact that they were put to death for not asking Odysseus permission to sleep with them is ludicrous, as the very definition of rape relies on a lack of permission. The choice of setting and style for this chapter is ironic, as, set in aShow MoreRelatedWhen It Comes To Adapting An Existing Story, We Must First1409 Words   |  6 PagesWhen it comes to adapting an existing story, we must first look at what literary adaptation is. Literary adaptation, is the adapting of a storybook source, such as a novel, short story or poem, to another genre or medium such as a film, stage play, or video game. 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Summary 4. Characters 5. Themes 6. Style 7. Historical Context 8. Critical Overview 9. Essays and Criticism 10. Compare and Contrast 11. Topics for Further Study 12. Media Adaptations 13. What Do I Read Next? 14. Bibliography and Further Reading 15. Copyright Introduction Eudora Weltys A Worn Path, first published in Atlantic Monthly in February, 1941, is the tale of Phoenix Jacksons journey through the woods of Mississippi

Criminal Activity Bonza †Bonza Handtools Ltd - Free Sample

Question: 1. Bonza Handtools Ltd. manufactures a popular power drill suitable for the home renovator. Financial and other data for this product for the last twelve months are as follows : Sales 20000 units Selling price $130 per unit Variable manufacturing cost $50 per unit Fixed manufacturing costs $400000 Variable selling and administrative costs $30 per unit Fixed selling and administrative costs $300000. The directors of Bonza Ltd. want to try to increase the profitability of this product and invited senior staff to suggest how this might be done. Three suggestions have been received. The accountant, Jan Rossi, believes that a price increase of $10 per unit is the best way to boost profits. She would spend an additional $125000 on national advertising and contends, that if this is done, sales volume would not drop appreciably from last year. The production manager, Tom Tune, thinks that an improved quality product could increase sales volume by 25% if accompanied by an advertising campaign costing $50000 aimed at tradespeople as well as home renovators. The improved quality would add $5 per unit to the variable cost. Mr Tune believes that the price should not be increased. The sales manager, Mary Watson, wants to undertake a promotion campaign where a $10 rebate is offered on all drills sold during the three months beginning 1 April. Normally 6000 units are sold during that period an d Ms Watson believes that this could be boosted to 10000 units if an advertising campaign costing $40000 were launched late in March. The Tassie Company estimates that next year it will manufacture and sell 150000 units of its product. On the basis of that level of activity, it has budgeted for the following costs and prices per unit: Direct Material Cost $2.50 Direct Labour Cost 3.00 Variable Factory Overhead 1.50 Fixed Factory Overhead 2.00 Manufacturing Cost 9.00 Variable Selling and Administrative Cost 2.00 Fixed Selling and Administrative Cost 1.50 Total Cost 12.50 20% Mark-up 2.50 Selling Price $15.00 The Company has an opportunity to bid for the supply of an additional 40000 units of its product to a government department. No sales commission (variable selling and admin. cost) is involved and no additional fixed costs will be incurred. Give a reasoned opinion on the level of the bid that should be made in each of the following two circumstances: (i) The capacity of the Tassie Company's factory is 200000 units per year. (ii) The capacity of the factory is only 180000 units per year. 3. Critically discuss the following statements: a budget is a forecast of what is expected to happen in a business during the next year budgets are okay but they stifle all initiative. No manager would work for a business that applies control through budgets. any sensible person would start with the sales budget and build up the other budgets from there. a budget trying to be realistic will not motivate best performance. only adverse variances are worth investigating, because favourable variances, by definition, must be good. 4. ABC Ltd makes trailers. It receives a special order to produce 350 trailers for a local retail outlet. The order will take 2,100 kg of material that costs $16.10 per kg and will require 1,400 direct labour hours and 525 machine hours. The following are the expected/budgeted annual costs for ABC Ltd: Direct labour $327,600 Direct labour hours 25,795 Direct materials $193,200 Indirect costs $98,400 Machine hours 9,840 Required: Calculate the overhead allocation rate: note that the process is labour-intensive Calculate the total costs of the special order Calculate the cost of the special order if ABC Ltd uses machine time as the basis for allocating overheads Calculate the minimum price per trailer that ABC Ltd could accept. Explain how segmented overhead cost pools and activity based costing can assist accurate costing for pricing purpose Explaining how segmenting the overheads can help in allocating overhead costs to individual jobs or services. You must support your discussion by real world examples and acknowledge the source of your information (referencing). Answers: 1. Bonza Handtools Ltd Statement Showing Profitability under various proposals Sl. No Particulars Note Details Current Proposal 1 Proposal 2 Proposal 3 a Sales units First 3 Months 6000 6000 6000 10000 b Sales units Balance Period 14000 14000 19000 14000 c Total Sales units annual 20000 20000 25000 24000 d Selling Price $ pu First 3 Months 130 140 130 120 e Selling Price $ pu Balance Period 130 140 130 130 f Variable Manufacturing Cost $ pu given 50 50 55 50 g Variable Selling and Administrative Cost $ pu given 30 30 30 30 $ h Total Sales a*d+b*e 2600000 2800000 3250000 3020000 i Total Variable Manufacturing Cost c*f 1000000 1000000 1375000 1200000 j Total Variable Selling and Administrative Cost c*g 600000 600000 750000 720000 k Fixed Manufacturing Cost Given 400000 400000 400000 400000 l Fixed Selling and Administrative Cost Given 300000 300000 300000 300000 m Additional Advertising Campaign Cost Given 0 125000 50000 40000 n Profit during the year h-i-j-k-l-m 300000 375000 375000 360000 Report to Bonza board Proposal 1 (Jan Rossi) If Proposal of Jan Rossi to increase the price of $10 has been accepted then, the profit has been increased by 75,000 from the current profit. The only risk associated is that if the advertisement campaign falls, then there might be huge fall in the profit along with the additional cost burden of advertisement cost. Further, it will create burden on the middle man consumer and the company may lose loyalty of the said group. Proposal 2 (Tom Tune) If proposal of Mr. Tom Tune to improve the quality along with advertisement campaign has been accepted then following scene may create Increase in quality will additionally cost $5 per unit, which will lower the contribution p.u. Additional advertisement cost of 50,000 is to be incurred, to increase the sale by 25%. This lead to increase in Profit by 75,000. Existing Consumer will more satisfied as they get the advanced product at the same price plus new consumer will also join. Proposal 3 (Mary Watson) With the proposal of Mr. Watson to reduce the sale price by $10 for first 3 month will increase the company profit by 60,000 after considering the additional advertisement expenditure of $40,000. There might be risk of reducing the consumer as the consumer may think that the fall in price may also led to fall in quality. 2. Case a) Capacity 200000 Units Sl No Particulars Details $ per unit 1 Direct Material Cost Given 2.50 2 Direct Labour Cost Given 3.00 3 Variable Factory Overhead Given 1.50 4 Total variable Cost 1+2+3 7.00 5 Mark up 20% of 4 1.40 6 Minimum Price Charged 4+5 8.40 Since the Annual Capacity of Tassie Company is 200000 unit and currently the company is producing 150,000 unit. This means that the company has an additional capacity of 50,000 order. So, the company can sell the product at Variable cost plus mark up which comes to $8.4. No need to Consider Fixed cost as it is irrelevant. Case b) Capacity 180000 Unit The Annual capacity is 180000 units and the current sale is 150000 unit. Now, if the company wants to full fill the government order then he has to scarify the current sale of 10,000. This mean the company has to scarify the profit on current sale which comes to $2.5 for 10,000 unit. So Average price should be for first 30,000 $8.4 units and for 10,000 unit (8.4+2.5) which comes to 10.9. Now Average = (30000*8.4 + 10000*10.9) / (30000+10000) = $9.025 3. A budget is a forecast of what is expected to happen in a business during the next year Budget is just planning for the next year. Budget is just like a statement which consists of the target production to be achieved within the budgeted cost. It is a statement which consists of various head of expenditure along with the budgeted amount to be spent on each head. Budget is handy in controlling the expenditure of the organization. Budget basically focus on quantitative factor just like to reduce the cost or increase the profit of an organization, it does not consider the qualitative factor which may occurs due to increase in cost. In most of the organization the performance and bonus of the manager will depend upon the budgeted expenditure that manager has achieved. Through Budget one can forecast it future along with the growth of its organization. Budget can also be revised as per change in scenario. Budgets are okay but they stifle all initiative. No manager would work for a business that applies control through budgets. One cannot ignore the fact that Budget brings Control at any level. Many Managers would not like to work for a business which applies control through budget because budget brings control and they are not free to spend money as per will. They will not try the new innovation as they have the budgeted money to spend. The Budget is prepared mainly on traditional system which is depends upon the last year actual rate. But most of the time it has been noticed that the price of the material will increase from the last year and the expenditure will increase and cross the budgeted expenditure. This increase in expenditure will create problem for the Manager as now they have to justify their senior or the Top Management regarding the reason for increase in expenditure which is a big trouble for them. Further, the performance of the Manager is also appreciated with the amount of saving that he can made in the budget and there bonus is also depend on the same. So, in order to earn bonus they sometime cut short the expenditure which may lead to quality reduction of the product. Any sensible person would start with the sales budget and build up the other budgets from there. Budget can be classified into many groups such as production budget, sale budget, expenditure budget, income budget. But a sensible person starts with the sale budget because every budget is linked with each other. From Sale budget we get can idea about the expected sale that the company can made within the given period of time. Depending upon the sale the production budgeted will be prepared after taking n account the opening inventory and the desires closing inventory that the company want to maintain. With Production budget we will get the amount of expenditure that the company wants to incur in producing the amount of unit that we get in the production budget. So, a sensible person first make the sale budget and all the other budget figure he will get from the said figure. Sale figure is the base and the rest we will find as per the follow disused above. A budget trying to be realistic will not motivate best performance. As already discussed earlier budget brings control. The Budget should be such that it brings the maximum utilization of the current resources so as to optimum increase in the profit of the company. The main motive of the budget is cost control or cost reduction. The production manager is always at the pressure to reduce the production cost to increase its bonus and also for performance appraisal. The another problem of the budget is that it consider only quantitative factor and not the qualitative factor. So, the production manager has to adhere with the amount of expenditure as fixed in the budget. They are not free to take risk and use new process or increase additional expenditure to improve the quality of the product. only adverse variances are worth investigating, because favourable variances, by definition, must be good. Once the budget has been prepared and the production has been started we must compare the budget with the actual expenditure in order to know the performance of the manager. We can do the variance analysis to know the activity/ expenditure head wise performance of the Manager. One of the most important feature of the budget is that we have to focus only on the adverse variance as the favorable is by definition is good. In Favorable variance the Manager has already made the saving. Now we have to concern on the adverse variance. i.e. how the same to be made favorable. The Management has to find the technique to decrease the expenditure and if the increase in expenditure is of permanent nature and is driven due to non wastage of the manager then the budget should be revised to give effect of such increase as the increase in expenditure is market driven and is justified. 5. 1. Overdraft Allocation Rate Overhead Cost = 98,400 Direct Labour Hours = 25,795 Overhead allocation Rate = 98400 / 25795 =3.81 Cost of Special Order Statement of Total Cost Particulars Amount ($) Direct Material Cost (16.1X2100) 33,810.00 Direct Labour Cost (327600/25795)X1400 17,780.20 Indirect Cost (1400X3.81) 5,334.00 Total Cost 56,924.20 3. Cost of order if machine time used Overhead Allocation rate = 98,400/9840 =10 Statement of Total Cost Particulars Amount ($) Direct Material Cost (16.1X2100) 33,810.00 Direct Labour Cost (327600/25795)X1400 17,780.20 Indirect Cost (525X10) 5,250.00 Total Cost 56,840.20 4. Minimum Price of Trailer When Machine Hr Rate is considered When Labour Hr Rate is considered Price per Trailer 162.40 162.64 (56840.2/350) (56924.2/350) 5. Segment Cost Pool The main Purpose of Segment Cost pools and Activity is to allocate the total cost incurred for an activity in particular head wise department. In activity based costing, cost is being allocated for the job based upon the time spent by the particular department in manufacturing such goods. The Activity based costing helps in better costing of the project and also assists the manager in efficient decision making regarding the pricing of the product to maximize the profit. The Production Manager is in better position in negotiating the price of the product with the buyer of the product. In Activity based costing first of all total direct cost in an particular department has been identified , then the estimated hours is being calculated for the department for which each department shall works, then we will divide the total cost with the estimated hours to identify the rate per unit. The total cost is said to be cost pools and the estimated hours is known as cost driver, then rate per uni t is calculated. It leads to cost reduction, better pricing and increase in profit of the company. 5. Overhead is a portion of the cost or an cost element which is also equally relevant as direct material cost and direct labour cost are important. Some of the examples of overhead costs incurred in an industry are electricity Expenses, rent expenses and repairs expenses of manufacturing parts, wages paid to work force for other than manufacturing activities. Overhead costs can be of both type i.e. the cost may be of fixed (which means it remains same and may does depend upon the level of production activity), variable cost (which depends on the total level of production activity), or semi variable cost. The Overhead costs incurred are to be apportioned among the various departments, as per their expenses incurred by the said department. The Overheads cost are mainly apportioned in manufacturing department of the factory, administrative and office department at head office, selling expenses incurred by the selling distribution department; all the said costs are to be apportioned on the basis of certain basis of ratio. (Henry F. Garcia, 1995). There are many items which fall under the said departments of overhead. Certain of examples to show how costs are apportioned on the basis of certain ratios is shown below. Supervision charges would be apportioned on the base of total employees working in the departments. Depreciation is to be apportioned on the basis of the machinery installed in the factory or HO. Expenses regarding electricity and machinery power shall be apportioned on the basis of unit power of the equipment. There are various method of apportionment of cost in service sector. Some of the method are Step down Method, Direct Method, Repeated Distribution Approach, Reciprocal Method, and Algebraic Approach. When cost has been allocated to individual job sand services it is easier to identify which the correct amount of cost that need to be incurred, and clear picture which helps in decision making and pricing policy as well. When overheads cost is allocated to different jobs and services the total cost of each department is identified along with the benefit derived from each department. Further, If the company wants to reallocate the costs of the departments whether service or manufacturing, to other departments then percentage basis of allocation will be required. (Natalie Grace) A real life example of how overhead allocation is done is mentioned hereby- Suppose, there are two production department A B of AB Ltd and two service departments. Production Departments: A $30000 B $26000 $56000 Service Departments: Stores $ 4000 Power $3000 $7000 Information relating to production departments are: Dept.A Dept.B Horse power of machine 300 200 Value of Stores requisition 2500 1500 Apportionment of Cost of Service Departments over Production Departments Items of Cost Basis of Apportionment Total Dept A Dept B Cost as per 56,000 30,000 26,000 Stores Value of Stores requisition 4000 2500 1500 (2500:1500) Power Horse Power of Machine 3000 1800 1200 (300:200) Total 63000 34300 28700 If we have been provided with the apportionment percentage and cost of allocation to each department is provided, then we can further allocate the cost of service department to the production department. From the above example, it has been clearly seen that the segmenting of the overhead cost to each jobs, services, or department is made and it can be easily allocated to such department..(Studies 2009) Bibliography Henry F. Garcia, C.P.M. "Assignment of Overhead Costs In a Service Organization Using Activity-Based." Assignment of Overhead Costs In a Service Organization Using Activity-Based, 1995: 1-3. Natalie Grace. "Reasons to Allocate Costs." Reasons to Allocate Costs 1. Studies, Board of. Cost Accounting and Financial Management. New Delhi: The Publication Department on behalf of The Institute of Chartered Accountants of India, 2009.