Managerial Accounting

timer Asked: Nov 28th, 2016

Question description

As a result of your recent graduation from CMU’s MSA program, you are offered a position as Vice-president of Manufacturing at Utica Plastics and Rubber, Inc. You are excited because this represents the single biggest salary increase in your life and it allows you to relocate to a warmer climate.. Shortly after arriving at work, you are given a report which shows these pertinent ratios for your manufacturing division: Fiscal Year ending October 31 2009-2010 2010-2011 2011-12 Inventory Period 88.7 days 110.4 days 120.8 days Sales Returns & Allowances 3.9% 4.7% 10.7% Cost of Goods Sold Ratio 37.5% 27.4% 33.5% Sales $70M $75M $85M Change in selling price per unit 0.0% 1% 1.1% Further analysis by your departmental staff revealed that the employees of Utica’s largest supplier of plastics, Toledo Plasteel, Inc. have been threatening a strike since early 2000. A strike is imminent, perhaps as early as October 15, 2013. Although Imperial Plastics, a major competitor of Plasteel, has offered to step in and supply all of Utica’s plastic needs, they are 12 per cent more expensive and their quality is not as good as Utica’s quality. The contract expired on October 1, 2013.. The industry benchmark for sales returns and allowances is 4 per cent; the benchmark gross margin ratio is 81%. Utica’s largest competitor, Penelope’s Plastics and Molds, Inc. has increased prices 4 times during the past three years and their quality standards are considered the highest in the industry. Returns are less than 1%. Currently, their prices are approximately 5 per cent above Utica’s prices. Required for Utica Plastics and Rubber, Inc: 1. Prepare a memo to the President of Utica Plastics and Rubber, presenting your analysis of the above facts. Suggest ways in which the company might improve their operations; but also compliment the company on their accomplishments. 2. Suggest at least three other financial ratios, statements, financial tools or analyses you would like to have used in order to better prepare yourself to become a successful Vice-president of manufacturing. Be sure to explain how they would have helped.

Studypool has helped 1,244,100 students
flag Report DMCA
Similar Questions
Hot Questions
Related Tags
Study Guides

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors