If I were Lynn Jennings I would tell Clark that we need to see the costs the pla
ID: 2469038 • Letter: I
Question
If I were Lynn Jennings I would tell Clark that we need to see the costs the plant is having. I would ask for a budget to where it shows all the fixed costs as well as materials included to see if Clark is actually telling me the truth. He can keep the cost per unit down but the quality can be bad since he is trying to produce as much as he can to keep the plant running. Also, buying excess material can be costing the plant more than it should in reality. I can tell Clark that he needs to see that ordering to much material can be bad because if the plant were to have low orders the material would not be used and the money invested in the materials can be used for something else that can help the company work up while they regain orders again. Clark would need to be thankful about ordering in excess for the plant because the material is taking up space the plant can use to expand when they receive orders. He can order the material he needs when he know how many orders he has. This will help by the material not taking up too much space and the plant will only be working when they have orders. This can also help the product cost to be kept down even lower because there is not much costs to be covered if there is less material available that didn’t need to be there.This a students response to my last question.. Need to reply to the post should be 80 words or more. Need help! Plz If I were Lynn Jennings I would tell Clark that we need to see the costs the plant is having. I would ask for a budget to where it shows all the fixed costs as well as materials included to see if Clark is actually telling me the truth. He can keep the cost per unit down but the quality can be bad since he is trying to produce as much as he can to keep the plant running. Also, buying excess material can be costing the plant more than it should in reality. I can tell Clark that he needs to see that ordering to much material can be bad because if the plant were to have low orders the material would not be used and the money invested in the materials can be used for something else that can help the company work up while they regain orders again. Clark would need to be thankful about ordering in excess for the plant because the material is taking up space the plant can use to expand when they receive orders. He can order the material he needs when he know how many orders he has. This will help by the material not taking up too much space and the plant will only be working when they have orders. This can also help the product cost to be kept down even lower because there is not much costs to be covered if there is less material available that didn’t need to be there.
This a students response to my last question.. Need to reply to the post should be 80 words or more. Need help! Plz
This a students response to my last question.. Need to reply to the post should be 80 words or more. Need help! Plz This a students response to my last question.. Need to reply to the post should be 80 words or more. Need help! Plz
Explanation / Answer
Clark should have suuficient materials in hand , for he might not want to loose order for want of material. materials order require time so there must be sufficient stock to replenish the orders, Fixed costs related to the plant will be incurred irrespective of the fact there is any production taking place or even if no unit is produced, only variable cost is controllable. product cost are caluclated by the costs assigned to the goods manufactured of which variable cost will be incurred only if production takes place thus by buying extra cost does not affect the unit product cost and other manufacturing costs which are assigned to production like indirect costs are uncontrollable.
The company can calculate EOQ ( economic order quantities) which see that we have sufficeint quantities in hand and thus there is no overstocking nor the production is stopped due to want to materials.
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