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however, the president is not considering a second shift due the
additional $1.00 per hour shift differential that would be necessary to
pay the hourly second shift workers.
The company had a cash flow problem in 2005 but has always managed
to make all payments on a timely basis. The president wishes to increase
the amount of cash on hand in the future so that the company will have a
greater margin of safety. To date, the company has not had difficulty
obtaining financing for expansion and does not foresee any future
difficulties in obtaining necessary funding for legitimate purposes.
The company has paid a consistently good dividend to the stockholders.
The president would like to continue this policy in the future.
DEPARTMENT STRUCTURE
Fantastic, Inc. has two separate production departments - one for each of
the paint types. Since the end products are not distinguishable, the
company uses process costing employing a FIFO inventory.
Absorption costing is used for all outside reports. All non-direct fixed
costs are allocated using various allocation bases as indicated throughout
the project. The Company does not use a full ABC costing system;
however, it does employee some of the ABC concepts in the budgeting
process.
The administrative department handles all of the purchasing, accounting,
and secretarial duties in a highly efficient manner. The need for separate
departments is not necessary at this time.
2005 INFORMATION
SUPER
DEPARTMENT
STUPENDOUS
DEPARTMENT
Number of machines available
26
20