Case Solution on Abrasm Company

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A
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Case Study
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On
ABRAMS COMPANY
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Of
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Management control System
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Presented to Presented by: -------------------------------------------------
DR B. A. Prajapati ModiRashmi S. (24) -------------------------------------------------
MeghaniShital L. (20)
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Trada Lalit V. (60)
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RajdevBrijesh (46)
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Ozha Sandip (47)
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Batch: 2010-12 -------------------------------------------------

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About The company
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US company
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Manufacturing auto parts
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Selling in Domestic as well as foreign Market
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Most of the Products related with….
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Automobiles
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Trucks& Buses
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Farm Equipments
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Product & Marketing Division
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Production Division:
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Company works on Three Parts.
1. -------------------------------------------------
Ignition Parts
2. -------------------------------------------------
Transmission Parts.
3. -------------------------------------------------
Engine Parts.
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Marketing Division:
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Selling Through two Department.
1. -------------------------------------------------
O.E.M. department.
2. -------------------------------------------------
A.M. department.
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EXHIBIT 1
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Partial Organization Chart
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Inside & Outside sales In 1992;
* Total sales $500 million
Inside sales (to AM div) - $100 million
Outside Sales (to OEM)- $400 million
* Ignition parts sales- $130million
* Engine parts sales- $90million
* Transmission parts sales - $100million
* AM Division sales- $180 million

ROI for the Manufacturing Plants
* Each Plant has to meet targeted ROI.
ROI = Budgeted Profit

Actual beginning-of-the -year net assets
Where
Budgeted Profit =( Expected Revenue- allocated O/H- tax)

Actual beginning-of-the-year net assets
= total assets-current liabilities.

Actual 1992 ROI computation- Rochester Plant
* Abrams company –Transmission PartsDivision
ROCHESTER PLANT
Profit & ROI...
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