FARR CERAMICS PRODUCTION DIVISION: A BUDGETARY ANALYSIS

[...]from January 2019, FARR was struggling to supply the required quantity each month due to the operational issues entrenched within their production schematic. [...]what was even more concerning was that FARR was receiving a lower order quantity than their budgeted amount from Rosenthal. The manu...

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Bibliographic Details
Published in:Independent business review 2019-01, Vol.12, p.25-30
Main Authors: Mahtab, Naheem, Safiuddin, Md, Razzaque, Rushdi Md Rezaur, Siddique, Mohammed Naveed Adnan
Format: Article
Language:English
Subjects:
Budgets
Case studies
Ceramics
Corporate profits
Direct labor costs
Management accounting
Manufacturing
Order quantity
Porcelain
Raw materials
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Summary:[...]from January 2019, FARR was struggling to supply the required quantity each month due to the operational issues entrenched within their production schematic. [...]what was even more concerning was that FARR was receiving a lower order quantity than their budgeted amount from Rosenthal. The manufacturing process consists of all standard stages like automatic and semi-automatic forming of products, low-pressure casting, high-pressure casting, biscuit firing in two hours, fully automatic glazing, glost firing, decoration firing at the last stage. The international division had drafted a budget for 2019 for Rosenthal's order for the cup, in light of the sales unit and cost of production. Since sales are independent of any fluctuations, the month to month budget could simply be calculated by considering just one-twelfth of the annual plan. CONCLUSION Holistically, this case provides an opportunity to understand multifaceted issues in costing and delivering products and develop the skill set to prepare budgets taking a wide array of operational factors and product-related information into consideration.
ISSN:1996-3572
2521-2990