William’s Misguided Methods
WMB Motorcycles had been headquartered and doing business in the United States for three years, building increased demand in the high-end market. The CEO of the company decided to explore the possibility of expanding the business to reach a different market, that of the daily commuter. With gas prices being what they are, the CEO believed that there may be a need for a new form of inexpensive transportation. With a few modifications to the product design, WMB Motorcycles may have the answer.
The CEO assigned William, the Director of Operations, to be in charge of performing the preliminary work in making the decisions regarding the market(s) in which to expand. William first visited some local firms to gain a feel for their level of interest and the viability of offering a smaller version of their motorcycle for local transportation. But, after a few visits, William rejected this strategy based on an overall viewpoint of the local business person and their apparent insufficient disposable income in the marketplace.
Then William decided to visit with and perform an analysis of 200 corporate locations, gauging the interest level of their employees. This process was extremely expensive and the time that William put into examining the data was extensive. He had difficulty with the analysis of the information obtained because the questions were limited to the participants’ level of interest in the proposed product. By the time William finished his analysis, six months had past and he had little to say about the expansion possibilities. The CEO decided to indefinitely delay the project because of the lack of hard evidence to support expansion into a particular direction. The expensive project was an albatross for William and he lost considerable stature in the company for his waste of company funds, time, and resources, with little or no results.
Your task is to evaluate William’s work in this process. Describe the major area he neglected, and discuss what this area would have identified. What four (4) external environmental variables should William have used? William also might have used an issues priority matrix. Define what this is and using an issues priority matrix, discuss three additional (3) factors that might have influenced William’s lack of serviceable results.
Baseball Products, Inc.
You are the new production manager of a small manufacturing company, Baseball Products, Inc., which is located in Littletown, Montana. Your company manufactures two primary products: baseball bats and baseball gloves. You have decided to implement ABC Costing to allocate overhead costs associated with these products.
Your task is to design an ABC report to present to management. Be sure to show an allocation of the overhead cost to Bats and Gloves and proof that you did the allocation correctly.
You ask the manufacturing supervisor for the necessary data to apply ABC Costing. You are provided with the following information.
The activities involved with manufacturing the bats and gloves in a week include the following.
Activity Bats Gloves
Set-Ups 2 4
Machining 150 hours 350 hours
Receiving 30 receipts 70 receipts
Packing 250 deliveries 550 deliveries
Engineering 400 hours 600 hours
The overhead costs per activity are as follows in a week.
Activity Cost
Set Ups $ 600
Machining $ 7,500
Receiving $ 3,000
Packing $16,000
Engineering $22,000
Total $49,100
Homework Assignments and Papers 