Grand Jean Co., Case Study

Topics: Management, Marketing, Generally Accepted Accounting Principles Pages: 2 (574 words) Published: June 26, 2012
Case: Grand Jean Co.
Goals for the Grand Jean Co. as whole are to provide consumers with a commodity that is comfortable and in good quality and style. The company has been in existence for a very long time and has survived many economical hurdles. Another goal appears to pride itself on efficiency. The description in the case gives significant attention to the revenue responsibility center as it describes the costs of the output using the historical cost of the material inputs plus labor and other production cost associated with its expense responsibility centers. The company’s marketing department has the goal of determining the necessary quantities of each line of the product that is needed to fill the demand of consumers, without over producing certain line thus causing and under production of another line. In one aspect, the marketing department shares the goals of total sales of the products but more focused on meeting the demand then quality of the product itself. Quality and quota while meeting the prescribed production cost is the responsibility of the expense center managers (Plant Managers) and the contractors used to supplement the products not producible by the company owned plants. In evaluating the current management planning and control systems for the plants and marketing division. Management begins planning by budgeting according to a predetermined monthly quota of a plant and in relation to its prior production history. The planning is for the next production year and includes a slight increase of anticipated improvement. Management reviews monthly production performance. If the quota were low, Grand Jean would analyze why it was happening and correct the problem quickly. Grand Jean also determines the allowed number of standard labor hours, given the number of pants actually being produced, and compared it with the actual labor hours to determine how a plant manager performed as an expense center. The strengths are in meeting the quota as...
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