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Essay / Research Paper Abstract
A 9 page paper reviewing production costs and processes at China Cola, which is successful but has been experiencing declining profitability over the past several years. Focusing on activity-based costing, the paper presents several alternatives to recommend that the company adopt a JIT to raw material procurement and add a second production line to avoid the costs of changeover from one product to another on the first. The result is an immediate 35% increase in total operating income. Includes 5 tables. Bibliography lists 6 sources.
Page Count:
9 pages (~225 words per page)
File: CC6_KSacctChinCola.rtf
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Unformatted sample text from the term paper:
In the current business climate of intense competition that only continues to increase, companies find themselves scrambling to keep up with growth as well as keep up with costs.
They add new products and services either to remain competitive or increase revenues, all the while knowing they also must increase profitability as well as revenues.
This has been the case at China-Cola Beverage Company in recent years. The company has added new products, but it has been experiencing declining profitability.
The purpose here is to assess the companys position and propose changes that can improve its profitability over time. Activity-Based Costing Activity-based costing
can identify which activities are the most profitable for the company, thereby showing it where it needs to place the most emphasis of effort. It may be allocating too
great a portion of resources to an activity that is less profitable than another receiving a smaller share. The ability to refine this cost-and-result approach can increase profitability without
the need of increasing revenues. Increasing Profitability Cooper and Slagmulder (2000) write that there are ...three fundamental ways that firm profitability can
be increased: acquire the resources consumed by the firm at lower prices, perform the firms activities more efficiently, and become more effective at generating profits selling a more profitable mix
of products or services to a more profitable collection of customers through a more profitable set of distribution channels (p. 63). There has
been great attention to increasing efficiency over the past decade and longer, and adjusting the product and distribution mix is an ongoing process. What remains that most organizations do
...