Danshui plant no 2 answer. Danshui Plant 2 Answer 2022-10-05

Danshui Plant No. 2

Should 180,000 units show a profit or a loss? Monthly production target for DC is 200,000 units but three months study reflects that DC may not meet this target in 12 moths and would also overrun the cost barrier thus landing in an unprofitable situation. Or a labor efficiency problem? Analysis: Judging from the income statement, it can be observed that although with negative results, Danshui has managed to bring positive outcome in two areas: Revenue and cost of other chips Exhibit 2. . Negative variance in flash memory is due to damage of 1,000 units of flash memories during the month of August 2010. Executive summary — Danshui Plant No. What is the selling price? Evidence for hypothesis: For the purpose of calculation, please refer calculations done in excel sheet.

Danshui Plant 2 Case Study Solution for Harvard HBR Case Study

. LinkedIn This Case is about ACCOUNTING PUBLICATION DATE: September 28, 2012 PRODUCT : 913S05-HCB-SPA Danshui Plant No. Breakeven of 175,875 units indicate that Plant 2 of Danshui can easily earn profits in remaining nine months if the variable cost is controlled and can even get higher profits with more workforce. In the first three months of the contract it became obvious that the plant was unable to assemble the expected 200,000 iPhones per month and was operating at a loss. Simultaneously, August 2010 variance was studied by JM as well Exhibit 3 of case but she failed to recognised the concept of flexibility in cost per unit for 180,000 units and just compared budget for 200,000 units with actual data of 180,000 units, which caused an issue in her analysis. Should they worry about flash memory cost? Questions to be answered: - Using budget, how many iPhone 4 are required for breakeven. PeopleSoft Finally Accepts Oracles Offer B Ping An of China: The Making of an Insurance Giant and a Leading Chinese Integrated Financial Services Group On Becoming a Board Member Restoring Trust at WorldCom Akamais Underwater Options B : The Decision MARTIN BLAIR HUAWEI IN CANADA: CAN IT BECOME A TRUSTED PLAYER? Actual costs of 180,000 units in August 2010 and the flexible budget for 180,000 units are also compared for determining variances from budgeted predictions.

Danshui Plant No. 2 Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

If these issues persist, Danshui Plant No. It uses assembly line techniquesto ease the assembling procedure and have large plants to accommodate massive productions. Foxconn was the largest manufacturer in China and had contracts with Dell, Apple, and many other electronic equipment companies. However, Samsung took the responsibility of this damage against which Danshui already received additional revenues. However, as being in the middle of the value chain, Danshui does not have much control over material prices since the plant does not manufacture any components and quality. Please place the order on the website to order your own originally done case solution Transparent Value LLC Purolator Courier Ltd. This is just a sample partial work.

Danshui Plant No. 2, Spanish Version Case Study Solution for Harvard HBR Case Study

This in turn resulted in higher cost incurred for producing 180,000 which is a negative change solely because of usage variance. Answer 5: As can be seen from the above analysis labor is the major reason why Danshui Plant no. It helps to identify the changes in sales, material costs, labor costs and fixed costs. What was the actual cost per unit of production and shipping? The direct labor efficiency is actual hour minus standard hour multiplied by standard rate and it resulted in 15,565 with unfavorable variance. Therefore, in order to offer low prices, the plant will have to focus on reducing labor costs and improving operational effectiveness. Few items showed no variances whereas there were positive and negative variances observed in certain cost items.

Danshui Plant No. 2 childhealthpolicy.vumc.org

However variance observed in flash memories was due to damage of flash memories, which is discussed below. Items which did not changed from budget includes revenues, cost of application processor from Samsung , cost of phone calls chip from Infinion and cost of Gryoscope from STMicroelectronics. ACCOUNTING FOR BUSINESS DECISION MAKING MBSA 1413 DANSHUI CASE STUDY PREPARED FOR DR. Standard hours are 199,983 and actual hours are 201,302, it results in direct labor rate variance of 716,635 with unfavorable variance. This case, which investigates the challenges of outsourcing production, could be put to use an introduction to managerial accounting.

Danshui Plant No. 2 Case Study Solution for Harvard HBR Case Study

Since Danshui mainly competes on prices, being able to offer low prices is critical to its business. . The plant manager must identify the root of these problems so that they may be addressed properly and resolved. Situation: This report presents an analysis of a case where plant manager of Danshui DC , a Chinese company, Wentao Chen WC , is worried over variances observed actual results obtained versus budget developed in respect of its contract with Apple for assembling 2. Hence, Wentao Chen will have to make a decision with regards to the quality of the material that has been used in the manufacturing of iPhone 4 as well as the wages that they are paying and the number of qualified labor that will be needed in order to produce iPhone 4. LinkedIn Introduction: Danshui is in assembling business, based in Southern China. Apple should be ready to take this after all Apple would not want to fall short of iPhone 4 in the market which is detrimental to its market position.

Danshui Plant 2 Answer

The material price variance has been calculated by evaluating a difference between the actual price and the standard price and then multiplying it with the actual quanity of 181,000 units. As per the information available in the case there is a need to devise some strategies or to make decisions in order to solve the problems that are related to the iPhone 4 contract in the next nine months. These changes lead to increase in the cost of production and profitability as well of the Danshui plant 2. Negative variances included areas where cost rose in Flash memory from Samsung , cost hike in variable supplies and tools, rise in labour cost and supervision cost. . However, flexible-actual variance analysis reveals that possible causes for these issues might lie in the direct material flash memory variance and labor cost variance. .

Danshui plant no. 2 Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

What is breakeven in units? The plant supervisor considers whether a flexible budget would be useful for uncovering issues in relation to the static budget now utilized. Hypothesis: It is expected that the contract price should be raised in order to be profitable as variances observed in the 4. . Is there a labor rate problem? This not a viable option right now as we do not have enough time to make a 2nd unit and start production there. When budget figures are compared with actual figures, the differences is called the variance.

Danshui Plant No. 2 [d49o23prq649]

Cost per unit Exhibit 1 reveals the cost per unit and gross margin budgeted and actual of Danshui Plant No. Recommendation: Factors affecting the performance of a company are either controllable or non-controllable. Is this something that Danshui Plant No. . As the company increases its operations, it should increase its personnel for the purpose of increasing the production output per day or to buy additional machinery for automated production………………….

. It will help the company to understand the main causes of variance and distribute in categories based on favorable and unfavorable factors. Using budget data, what was the total expected cost per unit. If so, how might they address it? Non-controllable factors, on the other hand, are the ones, in response to which company makes protective strategies to avoid the negative effects like tax regulations, market crisis. The August report prepared by Jianye Ma suggests that the shortfall in production volume is the main reason for the unprofitable situation of the plant. Moreover, the variance related to the labor cost is Adverse which is comprised of the Assembly and packaging and as well as shipping costs.