This year you will attempt two time constrained assignments. The mark from these assignments will be 15% of the overall unit mark. These assignments are based on case studies where you apply theory, techniques and current literature to a range of business problems. The assignments are designed to assess the student’s ability to analyse, evaluate & synthesize complex organizational situations. Moreover these assignments are designed to help you develop your examination technique.
The best mark from the two time constrained assignments will used to calculate your final grade.
The second time constrained assessment is on the 10th March in LT 1 at 13.00, attendance is mandatory. To prepare you are expected to analyse the case study and revise the material we have studied so far You should bring your analysis to your assignment workshops (w/c 29th Feb) for formative feedback. You are allowed to bring notes to the assessment (no laptops as there isn’t enough space). The report requirements will be given to you on the day but expect to produce a written business report for the management team (see the case study below).
Time Constrained Assignment Two – Pre-seen Material.
Fullers Ltd manufacture components for the electronics industry. They tend to concentrate on low volume, highly complex products and they have an excellent reputation for quality and flexibility. Three years ago they launched the HP1, the HP1 is a very simple product and by Fuller’s standards it is very high volume.
Until last year sales of the HP1 regularly beat the forecast but this year the results have been far less impressive and the senior management are concerned that they are not making the returns they are expecting. At a recent management meeting the following comments were noted
Comment 1 – The sales director said “we need to put the price down, we are just too expensive. I have had some research conducted & it appears that for every £2 reduction in price we will sell an extra 250 units”
Comment 2 – In reply the finance director said “We need to be more efficient, I haven’t calculated the labour variances as yet, but last month we used 30% more labour hours than the standard”
Comment 3 – The production manager responsible for the HP1 said “I don’t think that performance is that bad, the problem is that the HP1 receives loads of allocated overhead. This is a really simple product which is made in large quantities, surely it doesn’t cost this much overhead to make it”
Continued…
Budget v Actual Month 1
Budget Flexed Budget Actual Variance
Demand 3400 3024 3024
Sales Revenue £292,842 £260,457 £260,457 £0
Component A £51,000 £45,360 £46,267 -£907
Material B £112,200 £99,792 £97,258 £2,534
Labour £20,400 £18,144 £25,606 -£7,462
Gross Profit £109,242 £97,161 £91,326 £5,835
Indirect Cost £41,650 £37,044 £44,547 -£7,503
Operating Profit £67,592 £60,117 £46,779 -£13,338
Notes
The company set price by calculating the full standard cost of production & adding 30%
Each HP1 uses 1 unit of Component A & the standard price of Component A is £15 per unit. The company used 3,024 units of Component A in the month
Each HP1 should use 3 Kgs of Material B & the standard price of Material B is £11 per kg.
Data detailing the actual quantity of Material B purchased in the period is not yet available
Each unit should take 0.5 hours to make and the standard cost of labour is £12 per hour. 2,092 labour hours were worked during the period
The company have a factory wide overhead absorption rate of £24.5 per direct labour hour. The HP1 takes 0.5 hours to make and therefore receives £12.25 of overhead per unit
342 units required some form of rework during the period. The rework target is 2% of production
There were 93 customer returns during the period. The target for all products is 1%.
The company operates a just in time production system
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