Week 8: Cost Accounting and Management Decisions
Leah M. Pasternak
Professor Bryan Womack
December 1, 2013
Cost Accounting and Management Decisions
A unique and innovative manufacturing company
It all started with an incandescent light bulb and from there, rocketed into one of the most successful, world-renowned company in the world. Thomas Alva Edison first established Edison General Electric Company in 1890 (General Electric, 2013). Two years later, another electrical competitor, the Thomson-Houston Company, merged with Edison General Electric to become the General Electric Company we now know today (General Electric, 2013). Manufacturing innovators in so many various products ranging from lighting to transportation, the General Electric Company has withstood over a century of economic trends, and is by far, one of the most important manufacturing companies in the world. Some of the primary and well-known products manufactured by the General Electric Company are GE appliances and large jet aircraft engines. Variable and fixed cost structures and what they mean to GE managers.
General Electric uses simple and competitive cost structures as one of their main strategies which has proven to be extremely effective within their company, and has enabled them to withstand years of changing economies. Management focuses primarily on improving structural costs in order to achieve increases in speed, improved quality of products and services, significant cost reduction, and an increased competitive advantage for GE’s customers and for their company as a whole. The management at General Electric is constantly looking for ways to improve their variable costs as well as keeping a firm handle on their fixed costs, in order to maintain larger profit margins in the future. In 2012, General Electric’s profit margins grew to 15.1% due to management’s continuous efforts to keep their cost structure competitive and effective....
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