Catawba Industrial Co. case study Report
Submitted By: Bhawna Dudeja
Q1 Is the company correct in its practice of not manufacturing standard model compressors on Sundays because of the accounting loss incurred on each unit? Ans. Acc to case study from Monday to Friday they are producing 20 units and getting the profit per unit is $1800 and on Saturday they are producing 4 units and profit per unit is 450 and on Sunday they are not producing any unit because there labour cost is high and there is loss of ($900) so it means that they are making Monday to Friday 20 units and on Saturday they are making 4 units so its worth to produce 4 units on Sunday they are getting a loss of ($4*-900_)=(3600) company should not manufacture standard model compressors on Sundays because of following: - * Labor wages are double time on Sunday.
Average per hour wages=$20
Average per hour labor on Sunday= $40
* As the machinery is old, repair & maintenance also need expense and time. So
Sunday could be the best time for services of machinery and giving rest to
Q2 If marge McPhee decides to manufacture ten light weight compressors each week and to sell them at a price of $8,000, How much better off or worse financially would Catawba be? Ans 2.If we analyze the sale forecast report, which says at price $8000 there is demand of 10
units per week, which is the least (so there is risk factor attach to it).
Secondly, higher deprecation cost for using new technology & extra amount incurred on
software’s add extra amount to its Total cost.
Q3 What weekly production plan for standard and light weight compressors would result in the highest financial return for Catawba?
Ans3.It should be weekly production for...