Quality For Acme LTD - 13730

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Earned: $327.285
Request Detail
Price: $11
  • From: Business,
  • Due on: Fri 07 Sep, 2012 (03:46pm)
  • Asked on: Fri 07 Sep, 2012
  • Due date has passed, but you can still Post Solution.



The general manager of the manufacturing division of Acme, LTD, is preparing for an upcoming P & L meeting with her boss and representatives from Corporate Accounting. She begins by reviewing the data she has collected.


Category              Last Year                              This Year

Sales                     $25,000,000                        $30,000,000

COGS                     $21,250,000                        $25,500,000

S G & A                 $ 2,000,000                          $ 2,400,000

Net Profit            $  1,750,000                         $  2,100,000


Prices for the company’s products and cost remained relatively constant for the past year.


As she digs a little deeper, she becomes concerned about rising quality costs. Total COQ last year was $3,187,500. This year it has gone up to $3,825,000 – a $637,500 increase. She is certain that the accountants will see this as an unreasonable increase in quality costs. She is concerned about the best way to present the COQ figures at the meeting and show the true picture. How do you interpret this increase and what advice would you offer her about the best way to present the information?

500 words

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