You’ve just been hired onto ABC Company as the corporate controller.
ABC Company is a manufacturing firm that specializes in making cedar
roofing and siding shingles. The company currently has annual sales of
around $1.2 million, a 25% increase from the previous year. The
company has an aggressive growth target of reaching $3 million annual
sales within the next 3 years. The CEO has been trying to find additional
products that can leverage the current ABC employee skillset as well as
the manufacturing facilities.
As the controller of ABC Company, the CEO has come to you with a new
opportunity that he’s been working on. The CEO would like to use the
some of the shingle scrap materials to build cedar dollhouses. While
this new product line would add additional raw materials and be more
time-intensive to manufacture than the cedar shingles, this new
product line will be able to leverage ABC’s existing manufacturing
facilities as well as the current staff. Although this product line will
require added expenses, it will provide additional revenue and gross
profit to help reach the growth targets. The CEO is relying on you to
help decide how this project can be afforded Provide details about the
estimated product costs, what is needed to break even on the project,
and what level of return this product is expected to provide.
In order to help out the CEO, you need to prepare a six- to eight-page
report that will contain the following information (including exhibits,
but excluding your references and title page). Refer to the
accompanying Excel spreadsheet (available through your online course)
for some specific cost and profit information to complete the
calculations.
Final Paper Spreadsheet