Bridgeton industries case study the automotive component and fabrication plant (acf) is part of bridgeton industries they supplied components to the big-three domestic automobile transcript. Therefore, we should not outsource or delate manifolds in conclusion, if acf wants to get more accurate evaluation on products, abc costing system should be adopt the consulting company should also make sure the data from competitors is reliable. In 1987 acf sought the advice of a strategic consulting firm to review and classify bridgeton’s products there were three classifications (class i, ii and iii) for the five products manufactured (fuel tanks, manifolds, front and rear doors, muffles-exhaust systems, oil pans). Manifolds have been downgraded from class 2 to class 3 acf on a seesaw on a more positive note from the underpaid (but incredibly gifted) consultants foreign competition rising gasoline prices shrinking pool of. Assume you have been hired as a consultant by bridgeton industries to advise the company as to whether or not the company should outsource manifolds would you outsource manifolds from the acf in 1991.
The recommendation based on the model year budget of 1991 (see table 6) was that they should not outsource manifolds from the acf in 1991 because it make the total gross income of the company dramatically decrease. Bridgeton what is the by outsourcing some products or discontinuing product lines in 1991, with and without manifolds 15963 [spring 2007] managerial . Q would you outsource manifolds from the acf in 1991 why or why not what more university of alberta acctg 523 - winter 2015.
Assignment one design of cost systems – bridgeton industries question – would you outsource manifolds from the acf in 1991 why, or why not. With the resulting loss of domestic market share, acf is facing intense competition from not only other suppliers but other bridgeton plants as well the task of remaining cost competitive is daunting as outsourcing seems to be catching on as a way to cut costs. We have already had to outsource oil pans and muffler-exhaust systems and despite our improvements in the production process, we may have to outsource manifolds this would be regretful to our company if emission standards are raised causing increased demand for the light weight stainless steel manifolds produced here at acf.
Assume that the selling prices, volumes, and material costs for the 1991 model year will not change for fuel tanks and doors produced by the acf of bridgeton industries assume also that if manifolds are produced, their selling prices, volume, and material costs will not change either. Description assignment one design of cost systems â bridgeton industries question â would you outsource manifolds from the acf in 1991 why, or why not. Assume that the selling prices, volumes, and materials costs for the 1991 model year will not change for fuel tanks and doors produced by the acf of bridgeton industries assume also that if manifolds are produced, their selling prices, volume, material, and direct labor costs will not change. Change for fuel tanks and doors produced by the acf of bridgeton industries assume also that 10 would you outsource manifolds from the acf in 1991 why, or why . Essay bridgstone industries 1353 only other suppliers but other bridgeton plants as well be incurred if we shut down production for manifolds and outsource.
Therefore we should non outsource or delate manifolds in decision if acf wants to acquire more accurate rating on merchandises abc bing system should be adopt. Immediately affecting the acf should bridgeton choose to outsource the manifolds in the 1991 model year bridgeton industries. The acf gone through different industrial uses until the founder of bridgeton purchased it and it became the original plant site for bridgeton industries in the early 1900s the acf faced the competition from local suppliers and other bridgeton plants.
Q would you outsource manifolds from the acf in 1991 why or why not what more information would you want before reaching a final decision a bridgeton should outsource manifolds from acf only if it results in lowering costs as mentioned above, bridgeton outsour. Manifold recommendation based on current cost system if we assume that the 1991 products, prices, sales volumes, materials costs and overhead are unchanged from 1990 and that there are no process improvements that would lead to a reduction in the direct labor of a product, it can be inferred that the company’s profits would be identical to . Overhead allocation and cost distortion – bridgeton case march 16, 2012 leave a comment q1the overhead allocation rate used in the 1987 model year strategy study at the acf was 435% of direct labor cost. Bridgeton reacts by closing acf diesel engine plant and hiring strategic consulting firm to classify their products on competitive position outsourcing manifolds .