Whale Printing Case Study

Topics: Variable cost, Costs, Cost Pages: 5 (1314 words) Published: March 29, 2011
Managerial Accounting
Case Study- Whale Printing Company
This case study is located in the Assignment Section of your Blackboard.  You are to analyze:  Question 1: - What are the key issues?
Answer 1: - An organization should include the 5 M’s of management in order to create value, run the business successfully and efficiently. These 5 M’s include: Money, Materials, Manpower, Machinery, and Methodology. The requirements for production usually represented as capital, labour, and land. Capital covers all man-made aids to future production; fixed capital stays put, and includes the physical plant, buildings, tools and machinery, while circulating capital includes raw materials and components. Labour includes all human resources. It may be unskilled, semi-skilled, or skilled, and local labour markets vary in the size and nature of the pool of labour. Therefore, Whale Printing Company included all the 5 M’s and was a successful, profitable venture. Victor Hussey, the President of the company was offered a job by Salter Associates to print 10,000 copies of an advertising brochure and offered him $700. Mr.Hussey was in a dilemma whether to accept the offer or not as the major issue in the case is Manpower. The job involved skilled people whereas the company just had 3 people in its lithography department, in which copy was converted to plates for the press. Also, the company had two big jobs scheduled for the week for regular customers and taking up Salter’s offer would put added pressure and would make it difficult for the people in the lithography department to handle everything together as their capability was limited. Although, they had capacity to handle Salter’s job, but problems with the two big jobs could change that. The other two departments (cut and bind, and package and ship) probably had capacity as it was easier to run them overtime is necessary. Printing 10,000 copies of the advertising brochure required the right people for the right job. Hence, the lithography job cannot be performed effortlessly by people from the other departments. Therefore, taking up the job offered by Katharine Salter would require Whale Printing to pay its employees for overtime, which would result in reduced productivity as the employees would work round the clock stressed and exhausted, which thereby will also include a hike in the variable costs. On the positive side, taking up the offer would definitely be profitable for the company as the job would run on one of the three smaller presses which were not fully scheduled for the week. The unused capacity of machinery could be conveniently used. Hence, the employees should be prepared for it, and should have the ability to complete the assigned tasks in the given period of time. Question 2: - What should be done about the key issues?

Answer 2: -Motivation is directly proportional to productivity, unless your employee is highly disciplined he won’t be productive if he was not motivated, unmotivated employees usually start to seek another job somewhere else which reduces their sense of belonging to your company and makes them less keen on doing the work correctly and efficiently. In order to eliminate the key issues and continue getting the best performance out of the employees, the best way is to maintain a good rapport between the employer and the employees. Therefore, a meeting could be arranged with the employees before a final decision could be made. All the pros and cons could be discussed and employees should be consulted as to whether taking up this one-time job would be beneficial, whether the employees would be able to handle the pressure and give in their best shot, how many hours would they require to complete the given task. Involve employees in the decision-making process by letting them know that their expertise and opinions matter.

Basically, motivation is needed in order to get the work done. Open communication is most employees' #1 priority....
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