Project 2 Writeup - Autotech Manufacturing MEMORANDUM TO:...

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Autotech Manufacturing MEMORANDUM TO: Anne Sergeant, Chief Accountant FROM: Ryan Thiel DATE: March 17, 2011 SUBJECT: Autotech Manufacturing Cost Analysis and Cost Recommendations Executive Summary This report provides a summary of the product costs of Part 127 and Part 234 using Traditional Costing and Activity Based Costing. Autotech Manufacturing would benefit greatly from switching from a Traditional Costing system to an Activity Based Costing. Switching to an Activity Based Costing system would give Autotech a more realistic picture of what their products actually cost. Based on the analysis results of the suggested Activity Based Costing system three recommendations are being made to Autotech Manufacturing. The recommendations are as follows. 1. The price of Part 234 should be raised immediately by 25% 2. Adopt a product differentiation strategy for Part 127 and advertise quality 3. Reduce receiving costs and require a minimum order size. These recommendations will ensure Autotech Manufacturing will become more competitive in the market and has an increase to overall profits. The following report will provide in greater detail the Activity Based Costing implementation and the cost recommendations. If you have any questions regarding these recommendations or this report feel free to email me at thielr@mail.gvsu.edu. Report
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This note was uploaded on 12/14/2011 for the course MGT 268 taught by Professor Paragkosalge during the Spring '08 term at Grand Valley State University.

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Project 2 Writeup - Autotech Manufacturing MEMORANDUM TO:...

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