We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

# Decision Making Across the Organization Essay Sample

The whole doc is available only for registered users OPEN DOC

Get Access

## Decision Making Across the Organization Essay Sample

The Martinez Company is using costing methods to determine whether they should go with a labor-intensive manufacturing method or capital-intensive manufacturing method. While determining which method they should take it is important to understand at what point they would break-even with costs and revenues, to determine if they will at least break-even at the end of the year, as opposed to being in debt. It is also important to determine to volume at which the company should produce with each method to determine how much would have to be produce by each method to have equal use of their revenues to costs. And finally we need to explain when it would be best to use each method. (Kimmel, Weygandt, & Kieso, 2011).

The break-even analysis is used to determine when total revenues equal total costs, both fixed and variable. The capital-intensive manufacturing method would break-even at \$4,702,500 costs to revenues, while the labor intensive method would break-even at just \$3,845,000. These numbers were found using an equation where variable costs, fixed costs, and net income are added together. The net income is set at zero because we want to simply know what we have to have in revenues to break-even, without an income. (Kimmel, Weygandt, & Kieso, 2011).

When determining the volume of units that need to be sold, we look at how many units need to be sold to break-even. The capital-intensive method would have to produce 156,750 units to break-even, while the labor-intensive method would only produce 128,167 units to break even.

To determine which method should be employed for the Martinez Company we need to look at the break-even analysis and the volume needed to be produced to break-even. The capital-intensive method appears to be more efficient even though it has a higher break-even rate, because it produces more at one time than the labor-intensive method, which will in turn allow for more products to be produced at one time and be available for sale than the labor intensive method. (Kimmel, Weygandt, & Kieso, 2011).

References

Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2011). Accounting: Tools for Business Decision Making (4th ed.). Retrieved from The University of Phoenix eBook Collection database.

We can write a custom essay

Order an essay

## You May Also Find These Documents Helpful

Australian food and liquor business Woolworths company

S1. Pioneer and among the oldest companies to introduce the modern retail trade model Woolworths limited was founded in September 1924, which was the very first store based company in Australia during that time. As a result, it gains customer’s interest as there was variety of groceries, magazines, health product and so on just in one place. Soon, Woolworths company had a little interest in shareholders...

Coca-Cola Company

Coca-Cola Company is an American multinational beverage corporation and manufacturer, retailer and marketer of nonalcoholic beverage concentrates and syrups. Coca- Cola Company has been found 131 years ago in May 8,1886 in Atlanta, Georgia, U. S. by Asa Griggs Cadler and John Pemberton. John Stith Pemberton is pharmacist who invented formula for the most popular product Coca-Cola in 1886 in Columbus, Georgia. The formula is...

The American landscape and lifestyle

“Baseball caps and hats are as much a part of the American landscape and lifestyle as just about any apparel accessory.” (Threadlogic Source) If the United States had a national hat, it surely would be the baseball hat. The popularity of logoed embroidered headwear is evident anytime you are out in public, and especially at a sporting event, men, women, and children show support for...

Roles and responsibilities of data users

In order to successfully gather data from the users, conducting an interview must be a good idea. Hence that may insufficient as users may not able to describe everything by themselves as the ideal meaning may not portrays only by words. So that it is better if the user can be observed while they use an interface they currently use which may portrays much information....

Codman & Shurtleff Private Company Information

Codman &amp; Shurtleff, Inc. , was established in 1838 in Boston by Thomas Codman to design and fashion surgical instruments. In 1964, Codman &amp; Shurtleff was acquired by Johnson &amp; Johnson inc. Codman &amp; Shurtleff operates from three manufacturing locations and a distribution facility in Massachusetts. They employ about 800 people in the United States. Codman &amp; Shurtleff mission statement was product oriented while that...

### Essays 65,502

300+
Materials Daily
100,000+ Subjects
2000+ Topics
Free Plagiarism
Checker
All Materials
are Cataloged Well

Sorry, but copying text is forbidden on this website. If you need this or any other sample, we can send it to you via email.

Sorry, but only registered users have full access

immediately?

Become a member

Thank You A Lot!

Emma Taylor

online

Hi there!
Would you like to get such a paper?
How about getting a customized one?

Couldn't Find What You Looking For?