Danshui Plant No. 2 in southern China has a one-year contract with Apple Inc. to assemble 2.4 million iPhones. The budget must be analyzed by the plant manager and prepare a summary of monthly operations to help identify the source of performance issues.
danshui case soluteon
The plant has had trouble hiring enough workers despite increasing wages over 30%. Additionally, the assembly procedure for an iPhone is complicated, with 140 steps involving over 100 parts. The plant supervisor considers whether a flexible budget would be useful for uncovering difficulties compared to the static budget currently being used. Students must perform breakeven and flexible budget analyses and compute and use cost variances as they judge solutions for the troubles of the plant with the iPhone contract. This case, which explores the challenges of outsourcing production, could be put to use as an introduction to managerial accounting.
PUBLICATION DATE: September 28, 2012 PRODUCT #: 913S05-HCB-SPA
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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