Session+1_Electronic+Boards+plc - SESSION 1 DESIGNING A...

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Source: Bhimani et al. 2008, Management and Cost Accounting, 4thed1SESSION 1DESIGNING A MANAGEMENT ACCOUNTING SYSTEMFOR ELECTRONIC BOARDS PLCIntroduction:Jack Watson, an electrical engineer, established Electronic Boards plc as a ‘one-­‐man’company in the early 1970s. From small beginnings, the company earned a reputationfor the quality and reliability of its products, and grew rapidly and consistently until, by2007, it employed over 200 people and had achieved a turnover of £56 million and aprofit after tax of £4.1 million. In addition to Jack Watson, the managing director, theboard consists of a production director, a research director and a marketing director.Market circumstances:Thecompanyproducescustomisedbatchesofelectroniccircuitboardsforapproximately 15 major customers in the defence, computer, electrical goods andautomotive industries. The market is highly competitive in respect of both price andquality. Market price has fallen steadily in recent years. In addition to several otherindependent firms both from the UK and Far East, many of the larger customers have in-­‐house facilities for the production of circuit boards. These latter firms deliberatelysubcontract a portion of their circuit board requirements for strategic reasons. In arecession they can cease or reduce their subcontracting and bring the work in-­‐house, sostabilising their own employment levels.Operational circumstances:The production process for circuit boards is complex, multi-­‐stage and highly automated.

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Term
Fall
Professor
Claudia Müller
Tags
Management, Joint Contracts Tribunal

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