This is a comprehensive problem and should draw on the various topics we discussed during this class. Consider what cost accounting techniques you would use to assess the problem plant.
You are in charge of Cost Accounting for the Ugly Christmas Sweater(UCS) Company. Motto: The Uglier the Better. If you want to win the Ugly sweater party contest, you purchase one manufactured by UCS.
UCS has what should be five identical manufacturing facilities located around the USA. All have the same approximate size building, and all employ about 100 people. All five have similar inventory management, equipment age, staffing, shipping and technology. Four of the five produce comparable financial performance, with Profit and Loss statements within 1-2 % of each other. Then there is the fifth manufacturing facility. Its profitability is 40% lower than the other four. Based on the reports you are receiving, inventory usage is 25% higher; overtime labor is 20% higher; and, their production rate is only 25% lower than the other four manufacturing facilities. Your CEO, CFO, COO and the Chair of the Board of Directors have asked you to lead a team to evaluate what is happening at the fifth manufacturing facility. Your leadership has given you complete access to everything: just tell them what is going on in manufacturing facility #5. How do you approach assessing manufacturing facility #5.
