Acco330 Cost management accounting Case Study Example | Topics and Well Written Essays - 1250 words

Acco330 Cost management accounting - Case Study Example The company has grown a lot during the past couple of decades despite changes in the industry which contracted the size of the industry from 350 to 42 furniture producers in the Ontario region. The firm had been operating smoothly for many years, but as it grew the company learned the importance of accounting work. Prior to 1997 the company had only utilized a bookkeeper who did not create budgets of other financial reports. In that year the company had major setback due a diminish profitability. This paper provides various business analyses in order to determine the root of the problem and find a solution to the problems at PFC. One of the major strengths of the company is the quality of its products. The management team of the company has formed a corporate culture in which the employees are committed to producing top quality merchandise. Strength of the company is the simplicity of its operation. The company only produces two types of products. This allows the firm to keep its cost down, lower its inventory, standardize production, and achieve economies of scale. A glaring weakness at PFC has been the lack of accounting work prior to 1997. The company also experience in 1997 other problems such as higher wages costs and a change in supplier which lowered the quality of its raw materials. The profitability of the company decrease significantly and the company was not able to properly manage its yearly budget due to the lack of experience of experience dealing with formal business reports. The firm should have updated the progress of its budget on monthly or quarterly basis in order to make the necessary adjustment to meet its financial goals. The company has a tremendous reputation in its domestic marketplace. The firm could increase its product offering to increase its sales. Another opportunity for the company is to export its products to the