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

Solartronics Inc Essay

Topics:

Paper type: Essay Pages: 1 (241 words)

Views: 254

1) Why are the reported results for January so poor, particularly in light of the expected, average monthly profit of $30,000?

The income statement for January shows that the firm reports a loss $8,400. It is so poor if compared with the expected monthly profit of $30,000 ($ 360,000/12). The main reason is related to the sales. If the budgeted sales for the year are $3,000,000, the expected sales for each month are $250,000 (3,000,000/12). From the case, the actual sales for January are only $165,000. The sales had been down, primarily due to the normal seasonal downturn.

Since there is a lower level of production than expected, there must be variances in the operating costs, mainly from the fixed factory overhead—volume, that are unfavorable. During this period, fixed costs also continued to be high which meant that the total allocation of the fixed costs was not spread over a large scale.

2) What additional data would be useful in analyzing the firm’s January performance? Why?

In analyzing the firm’s January performance, there should be additional data.

Some of these factors include: changes in the general level of economic activity and the effects that these changes have on the volume of sale. Various external forces could help the company analyze the January performance. Any changes in the labor rates could help the company analyze the performance. Changes in internal policies like production costs by management could also be of some help.

Cite this page

Solartronics Inc. (2016, Aug 31). Retrieved from https://studymoose.com/solartronics-inc-essay

How to Avoid Plagiarism
  • Use multiple resourses when assembling your essay
  • Use Plagiarism Checker to double check your essay
  • Get help from professional writers when not sure you can do it yourself
  • Do not copy and paste free to download essays
Get plagiarism free essay

Not Finding What You Need?

Search for essay samples now

Our customer support team is available Monday-Friday 9am-5pm EST. If you contact us after hours, we'll get back to you in 24 hours or less.

By clicking "Send Message", you agree to our terms of service and privacy policy. We'll occasionally send you account related and promo emails.
No results found for “ image
Try Our service
online

Hi, I am Sara from Studymoose

Hi there, would you like to get such a paper? How about receiving a customized one? Click to learn more https://goo.gl/CYf83b

online

Hi, I am Sara from Studymoose

Hi there, would you like to get such a paper? How about receiving a customized one? Click to learn more https://goo.gl/CYf83b

image

Your Answer is very helpful for Us
Thank you a lot!