Colorscope Case Study Analysis Apa

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Colorscope

...Accounting and Control Spring 2007 For information about citing these materials or our Terms of Use, visit: ________________ http://ocw.mit.edu/terms. 15.963 Managerial Accounting and Control Spring 2007 Prof. Mozaffar Khan MIT Sloan School of Management Colorscope, Inc. What is the external environment that Colorscope currently faces? „ „ „ „ Cheaper technology is lowering entry barriers. Better technology is eroding quality-based competitive advantage. Intense competition from „ „ „ small stand-alones, large national chains, and backward (vertical) integration by large printers. 15.963 [Spring 2007] Managerial Accounting & Control 2 Colorscope, Inc. „ Intense price pressures, and erosion of rents (high margins). What has Colorscope’s competitive advantage been, and why? „ „ Reputation for quality - poor quality is extremely costly because „ „ „ pre-press is the last stage at which an error can be detected, mistakes in advertised price can be expensive for content provider to honor, and merchandisers take great pride in their catalogs. 15.963 [Spring 2007] Managerial Accounting & Control 3 Colorscope, Inc. „ Fast turnaround – this is very valuable to the content provider because it gives them more time to decide, for example, how much to discount which items (i.e., it gives them more time to observe their competitors actions in a fluid environment). Actual......

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Colorscope Case Study

...3. Firs of all, full absorption cost analysis can guide pricing decisions. To be survive and profitable in the long run, the prices charged must exceed total costs. As indirect costs, such as rent cost, are also necessary supporting cost to complete the job, indirect cost should not be ignored. If Colorscope uses the direct cost analyses to make its pricing decisions, the product will be under cost, resulting in under pricing. The underpriced product, although the manager has originally thought that it could bring about increasing, will in fact lead to less revenue than the cost of resources they use. What’s more, by taking indirect costs into consideration and allocating overhead costs to the product, company can calculate a cost of each particular product depending upon the resources it consumes. In addition, full cost analysis contributes to better management. Inaccurate product costs will mislead managers about the profitability of different products. Therefore, managers might unknowingly promote unprofitable products while deemphasizing profitable products. Lastly, full absorption cost analysis helps to find unnecessary costs that should be eliminated, to manage the overhead costs that are usually fixed in the short run but are variable in the long run, and to improve product quality through better product and process design. The full cost analysis is based on the assumption that overhead costs are variable with cost object. For example, the supervision, quality......

Words: 287 - Pages: 2

Colorscope

...Management Accounting and Control Spring 2007 For information about citing these materials or our Terms of Use, visit: ________________ http://ocw.mit.edu/terms. 15.963 Managerial Accounting and Control Spring 2007 Prof. Mozaffar Khan MIT Sloan School of Management Colorscope, Inc. „ What is the external environment that Colorscope currently faces? „ „ „ Cheaper technology is lowering entry barriers. Better technology is eroding quality-based competitive advantage. Intense competition from „ „ „ small stand-alones, large national chains, and backward (vertical) integration by large printers. 15.963 [Spring 2007] Managerial Accounting & Control 2 Colorscope, Inc. „ Intense price pressures, and erosion of rents (high margins). „ What has Colorscope’s competitive advantage been, and why? „ Reputation for quality - poor quality is extremely costly because „ „ „ pre-press is the last stage at which an error can be detected, mistakes in advertised price can be expensive for content provider to honor, and merchandisers take great pride in their catalogs. 15.963 [Spring 2007] Managerial Accounting & Control 3 Colorscope, Inc. „ Fast turnaround – this is very valuable to the content provider because it gives them more time to decide, for example, how much to discount which items (i.e., it gives them more time to observe their competitors actions in a fluid environment). „ Actual costing......

Words: 804 - Pages: 4

Colorscope, Inc

...jobs needs to cover all direct and indirect costs. The direct material expense can be easily traced to jobs, while the overhead cost should be first accumulated into cost pools and then assigned to jobs. The data presented in Exhibit 11 and Exhibit 12 shows that the overhead cost takes up a greater portion than the direct cost does. Obviously, high overhead cost has a dramatic effect on profitability and competitiveness . Furthermore, the study suggests that overhead cost as a percentage of value added in American industry and as a percentage of overall production costs have been rising steadily for more than 100 years . Hence, we prefer the full absorption system instead of direct cost analysis system. In this case, the work flow at Colorscope includes five workstations, each of which consumes different labor hours by different jobs. And no absolutely linear relationship between the labor hours and the indirect cost exists. A single indirect cost pool containing costs from all these five workstations is allocated to jobs using the total labor hours of each job. However, the labor hours spent in every workstation are quite different so that the indirect cost of the job cannot be assigned to every workstation accurately. If the single indirect cost pool can be divided into five pools base on these five different activities, then each pool will be homogeneous. All costs in a homogeneous cost pool have the same or a similar cause-and-effect relationship with a single cost......

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Colorscope

...Recommendations for COLORSCOPE INC. By GROUP – 2 (GROUP - CD) A report submitted in fulfillment of the assignments for MANAC - II WMP 2013 [pic] Indian Institute of Management, Lucknow Noida Campus 2010 Date: 28/October/2010 |WMP6004 |AKSHAY BANSAL | |WMP6005 |AMIT AGARWAL | |WMP6007 |ANKIT SURI | |WMP6008 |ANKUSH VED | |WMP6009 |ANUBHAV KUMAR JAIN | |WMP6012 |BIKRAMJIT DEBNATH | |WMP6015 |CHANDER SHEKHAR SIBAL | |WMP6052 |SUROJEET SADHU | CASE NAME: ColorScope Situation: Colorscope is an example of a small firm seeking ways to compete in an increasingly intense competitive environment in pre-press printing. The external environment had changed with the advent of new technology, and new players entering the market had increased the supply side of the industry. Because Colorscope was not the market leader, its only option is to adopt a cost containment and quality control strategy. A simplified activity-based costing system was used to measure customer profitability. Complications: Colorscope found that many customers were unprofitable, and a few customers were responsible for most of the firm's profits. On further analysis, it was......

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Apple Inc.

...efforts in profit making alone is destined to untimely failure. This is because it will find itself on the wrong side with the government, stakeholders and the public as a whole. For this reason, any company that aspires to exist beyond its current boundaries must focus on its ethical and social responsibilities to company’s employees, consumers, shareholders and the public fraternity. Such corporate social practices brand a company positively as a good job provider, investor and provider of products and services. Apple Inc. has for the last few years appeared in the spotlight as one of the multimillion corporations that has had compliance as well as violation of ethical and social responsibility. As a giant corporation in technological production field and in the production of technology related goods and services, Apple Company has not been able to evade shortfalls in its ethical and social responsibility standards. Apple Products As mentioned earlier, Apple Inc. is a multinational corporation specializing in innovative technology. It specializes in the production of mobile phones and related devices. Among the most prominent products produced by Apple in the world today include: iPods, iPhones, Macs, iPads, iTunes just to mention a few. Apple’s products distinguishes themselves from other related products in the type of technology used making its products unique. Apple’s current position on the company’s ethical and social responsibilities Social responsibility refers......

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Colorscope

...Caso - Colorscope, Inc. 1. Desarrolle las preguntas planteadas al final del caso. a) ¿Como podría Colorscope mejorar sus operaciones? Potencializar los clientes actuales y realizar gestión comercial para conseguir nuevos negocios. Buscar Alianzas estratégicas con terceros para ofrecer sinergias en la cadena productiva (imprentas, talleres fotográficos, etc.). Invertir en nuevas tecnologías que le permita a Colorscope migrar procesos manuales a procesos digitales y así ser más eficientes en el proceso productivo, logrando de esta manera tener menores costos y ser más competitivos en precios, calidad y tiempos de entrega. Control de calidad debería realizar el proceso de revisión del prototipo final de manera digital, antes de imprimir, ya que si fuera necesario realizar cambios, se pudieran hacer de manera digital y de esta forma mejorar sus costos en materiales, procesos manuales y tiempos, posteriormente el área de producción realizar los cambios y nuevamente pasar por el proceso de calidad y una vez aprobado por esta área, se podría enviar al cliente de manera digital u otro mecanismo que no implique la impresión y envío físico como tal, optimizando costos, para que el cliente realice la revisión y aprobación final y posteriormente dar la orden de impresión, involucrando al cliente en diferentes etapas del proceso de desarrollo y aprobación de cada proyecto, todoesto con el fin de reducir los procesos de retoques tanto por errores internos como los que se......

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Colorscope Case Study

...3. Firs of all, full absorption cost analysis can guide pricing decisions. To be survive and profitable in the long run, the prices charged must exceed total costs. As indirect costs, such as rent cost, are also necessary supporting cost to complete the job, indirect cost should not be ignored. If Colorscope uses the direct cost analyses to make its pricing decisions, the product will be under cost, resulting in under pricing. The underpriced product, although the manager has originally thought that it could bring about increasing, will in fact lead to less revenue than the cost of resources they use. What’s more, by taking indirect costs into consideration and allocating overhead costs to the product, company can calculate a cost of each particular product depending upon the resources it consumes. In addition, full cost analysis contributes to better management. Inaccurate product costs will mislead managers about the profitability of different products. Therefore, managers might unknowingly promote unprofitable products while deemphasizing profitable products. Lastly, full absorption cost analysis helps to find unnecessary costs that should be eliminated, to manage the overhead costs that are usually fixed in the short run but are variable in the long run, and to improve product quality through better product and process design. The full cost analysis is based on the assumption that overhead costs are variable with cost object. For example, the supervision, quality......

Words: 287 - Pages: 2

Apple Inc

...Abstract Apple Inc is a multinational company that designs and manufactures computer hardware, software, and other consumer electronics. Today, Apple Inc is known as the largest technology company in the world. In May of 2010, Apples market cap closed at $222.12 billion which put them ahead of Microsoft Corp. As years went on, they continued the blow other companies out of the water. Currently Apple is the most valuable company in the world. Although they have many big competitors, they have a $260 billion market led over Microsoft and are worth more than $300 billion more than Google. Throughout this paper, I will conduct a ratio analysis of Apple’s most recent annual report. Ratio Analysis of Apple Inc Apple Inc, formally known as Apple Computer Inc, was founded in April 1976 by two men in a garage. For three decades, Apple Computer was mostly a manufacturer of personal computers, but later on grew into a multinational corporation that creates much more than just that. It was a long journey for, at the time, 20 year old founders Steve Jobs and Steve Wozniak. Today, with a spot in the top five on the Fortune 500 list, 437 retail stores in ten different counties, and a net worth of more than $670 billion, it is no secret the success Apple Inc has gained. It is now being predicted that reaching a market cap of 1 trillion could be a possibility. With such growing success, liabilities and assets are constantly changing from year to year. Common Size......

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Colorscope

...WU[WZVS`[Z_X[^ 74:5  74:5  !  !  !  $$ %# %$&# !  &$' !  &'&# !  !  #%% #$#$ !  $&# %$& $9:,943 SX^ _WWZYcS _`[U[\W`WZSZ ZU^WS_ZY Z`WZ_WU[\W``bWWZb^[ZWZ`Z \^W\^W__\^Z`ZY WW `W^ZSWZb^[ZWZ`SVUSZYWVc``W SVbWZ`[XZWc`WUZ[[Y SZVZWc\S W^_ WZ`W^ZY`WS^W`SVZU^WS_WV`W_a\\  _VW[X`WZVa_`^    #$ !300/83984507,943 2,7093,3/.489 897,90 $9:,943 08.75943 ,08 0570.,943 #039 9078 %49, ;070,/ ,-4:74:78 ;070,/#,9047-8475943 #,90477;07#,90 #,90  ,-4:74:7 447$5,.0 4-!705,7,943             $.,333             8802-              :95:9             ":,943974 /0$5,.0 ......

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Dell Inc

...Dell Inc. Team A ACC362 – Financial Accounting I June 2, 2009 a. What were the company’s total current assets at the end of its most recent annual reporting period? The total current assets for Dell Inc.’s most recent annual reporting period are $20,151 million for period ending January 30, 2009. The contributions for the total current assets are cash at $8,352 million with the highest amount listed, other accounts are short-term investments, accounts receivable, financing receivables, inventories all are net totals. The last asset listed is other asset at $3,749 million. b. What were the company’s total current assets at the end of the previous annual reporting period? The total current assets for Dell Inc.’s previous annual reporting period are $19,880 million for period ending February 1, 2008. The increase in total current assets from year ending 2008 to the current reporting period of January 30, 2009 is $271 million. The largest swing in current assets was accounts receivable. The total decreased from $5,961 million to $4,731 million, a decrease of $1,230 million. The lowest swing was the financing receivable asset from $1,732 million to $1,712 million. This was a decrease of $20 million. c. Are the assets included under the company’s current assets listed in the proper order? Explain. Dell Inc. lists their assets in the order of liquidity. Their balance sheet lists cash first, then short-term investments, accounts receivable,......

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Ust Inc

...Debt Policy at UST, Inc. Introduction In 1998 the U.S smokeless tobacco industry generated $2 billion of retail revenue with approximately 5 million consumers of moist tobacco and 7 million consumers of chewing tobacco including loose leaf, twist, plug and dry. Moist smokeless tobacco consumption approximated 50% of the total. The factors contributing to the continuous growth of the moist smokeless tobacco was the increased prevalence of smoking bans which had led customers to switch to smokeless tobacco and the fact that smokeless tobacco was less expensive to use than cigarettes based upon an average per-week usage measurement. Additionally, consumers have been shifting over time to moist smokeless tobacco from loose leaf chewing tobacco. While the consumer base remains primarily male, smokeless tobacco is no longer confined to the stereotypical blue collar or rural users as approximately 30% of users had attended college. The overall moist smokeless tobacco market was expected to continue to grow at an annual rate of 1-3% with a larger portion of the growth expected to be in the price value segment. UST is the dominant producer of moist smokeless tobacco, or moist snuff controlling approximately 77% of the market. UST also has other business interests such as wine, cigars and international marketing of moist smokeless tobacco. UST has been a driving force in the overall expansion of the moist smokeless tobacco market over the years, primarily through product......

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Colorscope

...1. Why would any customer, let alone large advertising agencies and departmental stores, go to Colorscope rather than go to large printers listed in Exhibit 3? Before desktop publishing became popular, Colorscope had a competitive advantage through its expensive proprietary computer equipment that could produce complicated print special effects. Colorscope had also been able to build strong relationships with valuable customers through the years and had a good reputation for providing high quality work in its field. Another reason why Colorscope could compete with the large printers was the high fragmentation of the pre-press industry. This was due to the fact that most pre-press companies focused on just a few print products (e.g. catalogs, newspapers or coupons) and had strong specialized expertise in these. Because of that, Colorscope could provide higher quality than the large printers in the fields where it had specialized. Before the dawn of desktop publishing, which led to commoditization of the services, competition was more based on quality than on price. As a small agency, it is also probable that Colorscope could be more flexible in meeting specific demand and provide more tailored services to the few customers it served, compared to the large printers which would have a bigger and more bureaucratic organization. 3. What you have done above is a “full-cost” analysis. This is in contrast to a “direct-cost” analysis that ignores overhead costs. Is full......

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Colorscope Case

...Management Accounting and Control Spring 2007 For information about citing these materials or our Terms of Use, visit: ________________ http://ocw.mit.edu/terms. 15.963 Managerial Accounting and Control Spring 2007 Prof. Mozaffar Khan MIT Sloan School of Management Colorscope, Inc. „ What is the external environment that Colorscope currently faces? „ „ „ Cheaper technology is lowering entry barriers. Better technology is eroding quality-based competitive advantage. Intense competition from „ „ „ small stand-alones, large national chains, and backward (vertical) integration by large printers. 15.963 [Spring 2007] Managerial Accounting & Control 2 Colorscope, Inc. „ Intense price pressures, and erosion of rents (high margins). „ What has Colorscope’s competitive advantage been, and why? „ Reputation for quality - poor quality is extremely costly because „ „ „ pre-press is the last stage at which an error can be detected, mistakes in advertised price can be expensive for content provider to honor, and merchandisers take great pride in their catalogs. 15.963 [Spring 2007] Managerial Accounting & Control 3 Colorscope, Inc. „ Fast turnaround – this is very valuable to the content provider because it gives them more time to decide, for example, how much to discount which items (i.e., it gives them more time to observe their competitors actions in a fluid environment). „ Actual costing......

Words: 805 - Pages: 4

Cost Accounting: Colorscope Case Analysis

...Colorscope must alter its operation sequence in order to reduce idle time during assembly. Since the company is following a sequential processing of jobs, a high idle time for assembly means that scanning is taking a significant amount of time. Colorscope may consider purchasing the technology of the next generation. Further, Colorscope must learn not to put all of its eggs in one basket: it should not allow one customer to account for more than 30% of its business. The company should attempt to retain its currently profitable clients by providing competitive pricing specialized attention to each client. Since Colorscope is not a market leader, The five departments(prep, scanning, assembly, output, and quality control) serve as appropriate overhead cost pools for Colorscope. These are the major states in the production process. Hours are not clocked in these departments in fixed proportions. In order to effectively determine the amount of overhead in each overhead cost pool, we first allocated overhead to the cost pools(the five departments), and then allocated : Before desktop publishing became popular, Colorscope possessed a competitive advantage through its expensive proprietary computer equipment that could produce complicated print special effects. Colorscope has also been able to build strong relationships with valuable customers through the years. The company has always possessed a solid reputation for providing high quality work in its field. Another reason why......

Words: 450 - Pages: 2

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Colorscope

...Accounting and Control Spring 2007 For information about citing these materials or our Terms of Use, visit: ________________ http://ocw.mit.edu/terms. 15.963 Managerial Accounting and Control Spring 2007 Prof. Mozaffar Khan MIT Sloan School of Management Colorscope, Inc. What is the external environment that Colorscope currently faces? „ „ „ „ Cheaper technology is lowering entry barriers. Better technology is eroding quality-based competitive advantage. Intense competition from „ „ „ small stand-alones, large national chains, and backward (vertical) integration by large printers. 15.963 [Spring 2007] Managerial Accounting & Control 2 Colorscope, Inc. „ Intense price pressures, and erosion of rents (high margins). What has Colorscope’s competitive advantage been, and why? „ „ Reputation for quality - poor quality is extremely costly because „ „ „ pre-press is the last stage at which an error can be detected, mistakes in advertised price can be expensive for content provider to honor, and merchandisers take great pride in their catalogs. 15.963 [Spring 2007] Managerial Accounting & Control 3 Colorscope, Inc. „ Fast turnaround – this is very valuable to the content provider because it gives them more time to decide, for example, how much to discount which items (i.e., it gives them more time to observe their competitors actions in a fluid environment). Actual......

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Colorscope Case Study

...3. Firs of all, full absorption cost analysis can guide pricing decisions. To be survive and profitable in the long run, the prices charged must exceed total costs. As indirect costs, such as rent cost, are also necessary supporting cost to complete the job, indirect cost should not be ignored. If Colorscope uses the direct cost analyses to make its pricing decisions, the product will be under cost, resulting in under pricing. The underpriced product, although the manager has originally thought that it could bring about increasing, will in fact lead to less revenue than the cost of resources they use. What’s more, by taking indirect costs into consideration and allocating overhead costs to the product, company can calculate a cost of each particular product depending upon the resources it consumes. In addition, full cost analysis contributes to better management. Inaccurate product costs will mislead managers about the profitability of different products. Therefore, managers might unknowingly promote unprofitable products while deemphasizing profitable products. Lastly, full absorption cost analysis helps to find unnecessary costs that should be eliminated, to manage the overhead costs that are usually fixed in the short run but are variable in the long run, and to improve product quality through better product and process design. The full cost analysis is based on the assumption that overhead costs are variable with cost object. For example, the supervision, quality......

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...This case study is an excellent example of how different types of parties can be brought together in a large scale transaction and how the original energy of those early meetings can be lost over time. I imagine that when Anthony Athanas was purchasing those old piers back in the 1960s many, if not all, of his colleagues, friends, and family members told him that he was off his rocker. I’m sure Athanas was looking at this land as his family’s ticket to financial prosperity and somewhat of a legacy that he could leave to his descendants for years and years to come. One of the items I wish the case would have divulged is the amount of money that Athanas had invested in the properties. For me this information would have given an insight to his net worth and how much he had riding on this investment. I assume it was substantial given his actions later in the process. Twenty years later Athanas’ dreams came true and all those naysayers were more than likely green with envy. The amount of pride Athanas’ had in his investment at that moment had to have been insurmountable. Being approached by a big time real estate development company and their extremely wealthy client, Hyatt Corporation, must have made Athanas feel larger than life and made him feel like something he isn’t, which is a developer himself. The case doesn’t give much insight into whether Athanas had any representation or anyone consulting him throughout the process. From the beginning, I saw this as matchup...

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Colorscope

...Management Accounting and Control Spring 2007 For information about citing these materials or our Terms of Use, visit: ________________ http://ocw.mit.edu/terms. 15.963 Managerial Accounting and Control Spring 2007 Prof. Mozaffar Khan MIT Sloan School of Management Colorscope, Inc. „ What is the external environment that Colorscope currently faces? „ „ „ Cheaper technology is lowering entry barriers. Better technology is eroding quality-based competitive advantage. Intense competition from „ „ „ small stand-alones, large national chains, and backward (vertical) integration by large printers. 15.963 [Spring 2007] Managerial Accounting & Control 2 Colorscope, Inc. „ Intense price pressures, and erosion of rents (high margins). „ What has Colorscope’s competitive advantage been, and why? „ Reputation for quality - poor quality is extremely costly because „ „ „ pre-press is the last stage at which an error can be detected, mistakes in advertised price can be expensive for content provider to honor, and merchandisers take great pride in their catalogs. 15.963 [Spring 2007] Managerial Accounting & Control 3 Colorscope, Inc. „ Fast turnaround – this is very valuable to the content provider because it gives them more time to decide, for example, how much to discount which items (i.e., it gives them more time to observe their competitors actions in a fluid environment). „ Actual costing......

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Colorscope, Inc

...resource costs to cost objects base on separate activities. In stage one, the total overhead costs are allocated to the separate activities base on different resource drivers. In stage two, the costs of activities are allocated to each cost object base on cost drivers. In this case, because the wages and depreciation costs can be traced directly to each workstation, we only need to allocate the rent and other indirect costs to the five workstations. In stage two, we have to assign the overhead cost of each workstation to each job base on the labor hours that each job consumed. Table 1: Stage One: The total overhead allocation to different workstations Job Preparation Scanning Assembly Output Quality Control Idle Total Wages $ 8,000 $ 32,000 $ 64,000 $ 10,000 $ 11,000 $ 125,000 Depreciate 500 25,000 $ 10,000 14,000 500 50,000 Rent 2,000 2,000 8,000 4,000 1,000 13,000 30,000 Others 1,311.5 5,246 10,492 1,639 1,311.5 20,000 Total Overhead 11,811.5 64,246 92,492 29,639 13,811.5 13,000 225,000 Allocation rate $ 73.82 $ 100.38 $ 72.26 $ 148.20 $ 86.32 In table 1, we allocate the total overhead costs to different workstations. Because the labor hours of each workstation are available in this case, we can use the labor hours as the cost drive to assign the overhead of each workstation to each job. The overhead cost per labor hour is the rate that we use to allocate the indirect cost. Table 2: Stage two: Overhead costs assignment to Job 61001 Job 61001 Job......

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Colorscope

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Colorscope Case Study Solution

...home front which may lead to tension and increased numbers of divorces etc. * Political issues: Loss of trust in administration and the government which may lead to political instability * Tension over taxes rise: Unemployment also brings up discontent and frustration amongst the taxpaying citizens. In order to meet the demands of the unemployment fund the government many a times may have to increase the taxes thus giving way to restlessness amongst the taxpaying citizens. * Insecurity amongst employees: The prevailing unemployment and the plight of the unemployed people and their families may create fear and insecurity even in the currently employed people. * Crime and violence: Increase in the rate of crime. * Suicide cases: Increase in the rate of suicide attempts and actual suicides as well. * Social outing: Unemployment may bring a decrease in social outings and interactions with other people, including friends. * Standard of living: In times of unemployment the competition for jobs and the negotiation power of the individual decreases and thus also the living standard of people with the salaries packages and income reduced. Causes of Unemployment in Pakistan: As our title of this post is causes and solutions of unemployment in Pakistan therefore in this part of post we will discuss about causes of unemployment in Pakistan as there are many reasons or causes of unemployment in Pakistan but most important causes of unemployment are......

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Colorscope Case Study

...3. Firs of all, full absorption cost analysis can guide pricing decisions. To be survive and profitable in the long run, the prices charged must exceed total costs. As indirect costs, such as rent cost, are also necessary supporting cost to complete the job, indirect cost should not be ignored. If Colorscope uses the direct cost analyses to make its pricing decisions, the product will be under cost, resulting in under pricing. The underpriced product, although the manager has originally thought that it could bring about increasing, will in fact lead to less revenue than the cost of resources they use. What’s more, by taking indirect costs into consideration and allocating overhead costs to the product, company can calculate a cost of each particular product depending upon the resources it consumes. In addition, full cost analysis contributes to better management. Inaccurate product costs will mislead managers about the profitability of different products. Therefore, managers might unknowingly promote unprofitable products while deemphasizing profitable products. Lastly, full absorption cost analysis helps to find unnecessary costs that should be eliminated, to manage the overhead costs that are usually fixed in the short run but are variable in the long run, and to improve product quality through better product and process design. The full cost analysis is based on the assumption that overhead costs are variable with cost object. For example, the supervision, quality......

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Case Study

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Case Study

...Colorscope Case Study 1. Competitive advantages of Colorscope Colorscope, which was founded in Southern California in 1976 engaging in providing the special-effects photography services to the local advertising agencies. Since the reputation has increased with the excellent sales performance in 1988, Colorscope main client was the giants in the field of entertainment and ad-agency. Therefore, compared with other competitors, the competitive advantages of Colorscope are: * Customer loyalty and business reputation. Since Colorscope has already founded for several decades it has established a fixed customer relation with the high value customers within the print and pre-press industry. For instance, as Exhibit 3 shows that some loyalty customers of Colorscope are the large national companies which ranked at top 15 in American printers, especially the Donnelly which has ranked at first in American printers with high level sales revenue. Therefore, compared with other companies, Colorscope can provide personalized service to the specific company which needs a specialized service. * Operational and training method. Under a unique training method, the employees of Colorscope grasp multitask working skills so that they can handle all works during the producing process. In addition, the operational method was significantly efficient with the appropriate work-flows and pre-press facilities before 1990, which means its productivity can be developed at a high level compared......

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Case Studies

...Case studies Name: Tutor: Course: Institution: Date: Flying to the Auto Bailout on a Private Jet Basic problems In this case study, there is wastage of resources. The CEOs of the nation's three largest automobiles uses private jets to attend the corporate public relations congress. This is wastage of resources since they are using private jets to travel when their companies are struggling to stay afloat. Ignorance is another basic problem evident in this case study. These CEOs are very ignorant. They attend the corporate public relation congress in Washington unprepared and thus appear to know nothing about their problems. The three companies, GM, Ford and Chrysler, lack the concepts of public relations. The main issues American economy is melting down. Most of the workers are losing their jobs since the companies cannot handle many workers anymore. The companies have got inadequate cash. Bankruptcy is another main issue experienced in this case study. The General Motors Company and the Chrysler can no longer pay their debts. Key decisions * According to the case study, the leaders have to come up with a new public relations strategy. * The CEOs should correct any mistakes they have made before such as using private jets to travel. * Introduce innovation in products * The auto industry of the US should promote its products. * Ensure transparency in business operations. SWOT analysis Strengths * Availability of resources for the......

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Colorscope

...1. Why would any customer, let alone large advertising agencies and departmental stores, go to Colorscope rather than go to large printers listed in Exhibit 3? Before desktop publishing became popular, Colorscope had a competitive advantage through its expensive proprietary computer equipment that could produce complicated print special effects. Colorscope had also been able to build strong relationships with valuable customers through the years and had a good reputation for providing high quality work in its field. Another reason why Colorscope could compete with the large printers was the high fragmentation of the pre-press industry. This was due to the fact that most pre-press companies focused on just a few print products (e.g. catalogs, newspapers or coupons) and had strong specialized expertise in these. Because of that, Colorscope could provide higher quality than the large printers in the fields where it had specialized. Before the dawn of desktop publishing, which led to commoditization of the services, competition was more based on quality than on price. As a small agency, it is also probable that Colorscope could be more flexible in meeting specific demand and provide more tailored services to the few customers it served, compared to the large printers which would have a bigger and more bureaucratic organization. 3. What you have done above is a “full-cost” analysis. This is in contrast to a “direct-cost” analysis that ignores overhead costs. Is full......

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Colorscope Case

...963 Management Accounting and Control Spring 2007 For information about citing these materials or our Terms of Use, visit: ________________ http://ocw.mit.edu/terms. 15.963 Managerial Accounting and Control Spring 2007 Prof. Mozaffar Khan MIT Sloan School of Management Colorscope, Inc. „ What is the external environment that Colorscope currently faces? „ „ „ Cheaper technology is lowering entry barriers. Better technology is eroding quality-based competitive advantage. Intense competition from „ „ „ small stand-alones, large national chains, and backward (vertical) integration by large printers. 15.963 [Spring 2007] Managerial Accounting & Control 2 Colorscope, Inc. „ Intense price pressures, and erosion of rents (high margins). „ What has Colorscope’s competitive advantage been, and why? „ Reputation for quality - poor quality is extremely costly because „ „ „ pre-press is the last stage at which an error can be detected, mistakes in advertised price can be expensive for content provider to honor, and merchandisers take great pride in their catalogs. 15.963 [Spring 2007] Managerial Accounting & Control 3 Colorscope, Inc. „ Fast turnaround – this is very valuable to the content provider because it gives them more time to decide, for example, how much to discount which items (i.e., it gives them more time to observe their competitors actions in a fluid environment). „ Actual costing......

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Cost Accounting: Colorscope Case Analysis

...Colorscope must alter its operation sequence in order to reduce idle time during assembly. Since the company is following a sequential processing of jobs, a high idle time for assembly means that scanning is taking a significant amount of time. Colorscope may consider purchasing the technology of the next generation. Further, Colorscope must learn not to put all of its eggs in one basket: it should not allow one customer to account for more than 30% of its business. The company should attempt to retain its currently profitable clients by providing competitive pricing specialized attention to each client. Since Colorscope is not a market leader, The five departments(prep, scanning, assembly, output, and quality control) serve as appropriate overhead cost pools for Colorscope. These are the major states in the production process. Hours are not clocked in these departments in fixed proportions. In order to effectively determine the amount of overhead in each overhead cost pool, we first allocated overhead to the cost pools(the five departments), and then allocated : Before desktop publishing became popular, Colorscope possessed a competitive advantage through its expensive proprietary computer equipment that could produce complicated print special effects. Colorscope has also been able to build strong relationships with valuable customers through the years. The company has always possessed a solid reputation for providing high quality work in its field. Another reason why......

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