Answer to Question #261943 in Accounting for enny

Question

SunnyDay Sdn.Bhd. Is a company that sells scarves. Each of its scarves has its own sewn logo. The cost of each logo is ï¿¥27. Darryl, the company's operations manager, received $20 per logo from an outside carrier. SunnyDay Sdn. bhd. Produces 100,000 logos for scarves every month. Its last cost accounting statement is: Direct Material =$550,000, Direct cost=$800,000, Variable overhead=$350,000, Fixed cost=$1,000,000, The Total cost = $2700000.

Give five qualitative factors that Darryl must consider before making a decision. Please give an explanation and appropriate examples to illustrate your factors.

Answer 1

Solution:

The five qualitative factors that Darryl must consider before making a decision include the following:

·        Morale - The effect of adding a break room to the production area on employee morale.

·        Customers - The effect on a company's customer opinion if it invests in answering phone calls in less time by adding customer support staff.

·        Investors - The effect of holding a road show to meet as many investors as possible.

·        Community - The effect of allowing employees to spend a few hours of paid time assisting with community projects on the local community.

·        Products - It may be possible to use slightly less expensive components in products. However, if this is done too frequently, it may create an overall impression of lower quality, leading customers to purchase fewer products.