Short-Run Managerial Decision Raises a ‘hamlet-Like’ Dilemma
Autor: Ronel Malabanan • May 10, 2018 • Research Paper • 374 Words (2 Pages) • 789 Views
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SHORT-RUN MANAGERIAL DECISION RAISES A ‘HAMLET-LIKE’ DILEMMA
Spark Publishing and Printing House
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Table of Contents
Company Background 2
Status Quo 3
Financial Analysis 4
Table 1: Current Summary of Costs of the Company 4
Table 2: Fine Printing Press Option Summary (Choice 1) 4
Table 3: Fine Printing Press Option Summary (Choice 2) 5
Table 4: Computations and Values Basis 5
Company Background
Status Quo
Financial Analysis
Table 1: Current Summary of Costs of the Company
SN | Cost Particulars | Publishing Department | Printing and Distribution Department |
1 | Salary and Wages | 340,000 | 288,000 |
2 | Material and Supplies | 170,000 | 340,000 |
3 | Depreciation | 115,000 | 150,000 |
4 | Allocated General Overheads | 85,000 | 115,000 |
5 | Warehouse Rent | 42,000 | 48,000 |
6 | Other Operating Expenses | 96,000 | 79,000 |
Total Expenses per department | 848,000 | 1,020,000 | |
Total Expenses | 1,868,000 |
Table 2: Fine Printing Press Option Summary (Choice 1)
Particulars | Benefits | Costs |
Contract Expense | - | 75,000 |
Pension Payable | - | 96,000 |
Managerial Salary | 72,000 | 78,000 |
Retrenchment | 120,000 | 150,000 |
Income on Sale of Materials | 88,000 | - |
Materials Penalty | - | 9,000 |
Loss on Sale of Equipment | - | 75,000 |
Income on Sale of Vehicle | 100,000 | - |
Rent Income | 60,000 | - |
Warehouse Lease Savings | 42,000 | - |
Other Operating Expenses | 64,000 | - |
Total | 546,000 | 483,000 |
Net Benefit / (Net Costs) | 63,000 |
Note: This result is based on Sameer’s option of choosing to sell the firm’s distribution vehicle to FPP, and to use its irretrievable leased warehouse for Publishing Department instead of renting on its old space.
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