Scribd Logo
Upload

Welcome to Scribd!

  • Case

    Uploaded by

    venkateswarant
    15 views4 pages
    Case

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    Case

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    15 views4 pages

    Case

    Uploaded by

    venkateswarant
    Case

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    of 4
    Case 11 LIQUID CHEMICAL COMPANY - REVISED” ‘The Liquid Chemical Company manufactured and sold a range of high-grade products throughout the United States. Many of these products required careful packing, andthe ‘company had always made feaue ofthe special properties ofthe containers used. They ‘had a pecia pateted ining made from a material known as GHL, and te firm operated department especially to maintain its containers in good condition and to make new ones toreplace those damaged beyond rept. “The general manager, Mr, Walsh, suspected for some time the frm might save ‘money, and get equally god service by buying its containers fiom an ouside soure. ‘After careful inguires, he approached a firm specializing in container production, Packages, Ld, and equisted a quotation. Atte same time he asked Mr, Dyr, his chit accountant, 19 provide him with an up-to-date statement ofthe cost of operating the container deparment ‘The quotation from Packages, Lid, ave within a few days. The frm was prepared to supply all the new containers required—t that time runing a the rate of 3,000 a year—for $250,000 year, the contract to run fora guarantced term of four yeas and ‘thereafter to be renewable from year to year. Ifthe required number of containers increased, the contract price would be increased proportionally. Additionally, and iespectve of whether the above contract was concluded oF no, Packages, Lid, undertook to cary out purely maintenance work on containers, shor of replacement, for a sum of '575,000 a year, onthe same contact arms. ‘Mr. Walsh compared these figures with te cost figures prepared by Mr. Dyer, ‘covering a years operations ofthe container department ofthe Liquid Chemical Company, which were as follows: “hin cate was repr tthe Colgate Den Grate Scho of Bases Admini, Univesity o ‘igi, tue nae Wren by Proenor Dani Soro PARTE PRODUCT AND SERVICE COSTING out of Operating he Conner Department Mr Dyer Pures Matis ‘i400 Later 10900 Deprtnent overea ‘Managers slay 16000 ‘Aloo cos of lat pace 5000 Depression of mucin sooo Masenaee of machinery "200 Other epee amo 200 33700 Propnion of per adminiave ween ASOD “Tot cost of Deparment yar ame Wile concluded no tine should be lot in closing the container department and in

    You might also like