Electro Inc
Electro Inc. Case Analysis
Who: Electro Inc.’s executive assistant
When: 1987
Where: Calgary, Canada
Electro Inc. is fast developing company which strive to build a high tech wonder company image, it also has clear market segmentation and specific strategies to penetrate this segment. However, in recent report, the company’s financial statement indicates that the company experience financial difficulties at this moment. Some managers believe that this difficulty is largely due to two projects – Series A and Mercury. In this case analysis I will examine these two projects and make some recommendations for the company’s management as a whole.
The Mercury Micro Computer (MC) is entirely compatible with the Personal PCs for all commonly available software. After the incident of the special monitors that supplies by outsiders, all of its other feathers, built-in software, communication, high tech design and PC compatibility, seems attractive for consumers. The forecasting sales volume is 5000 units and manufacturing 1000 units in Montreal and left 4000 units on Toronto. However, since the requirement number and prices of EWU (Equivalent Work Units) are different in these two factories, this would lead different results of net incomes. The original distribution – 1000 units made on Montreal and 4000 units made on Toronto will lead to a loss for the company, the original calculation is shown in the following:
EWU (Montreal): 30*$8.5 = 255
EWU (Toronto): 20*49.05 = 981
Montreal Made
(1000 units)
Toronto Made
(4000 units)
Revenue ($2,800/unit)
$2,800,000
$11,200,000
EWU
($255,000)
($3,924,000)
Direct Material (851/unit)
($851,000)
($3,404,000)
Recover Costs(700/unit)
($700,000)
($2,800,000)
Overhead (450/u)
($450,000)
($1,800,000)
$544,000
($728,000)
This relates to the budgeting problem, how to reasonably distribute the production within restrict of total 120,000 EWUs, this can either calculate by solver using Excel or list two equations. The basic principle is
Who: Electro Inc.’s executive assistant
When: 1987
Where: Calgary, Canada
Electro Inc. is fast developing company which strive to build a high tech wonder company image, it also has clear market segmentation and specific strategies to penetrate this segment. However, in recent report, the company’s financial statement indicates that the company experience financial difficulties at this moment. Some managers believe that this difficulty is largely due to two projects – Series A and Mercury. In this case analysis I will examine these two projects and make some recommendations for the company’s management as a whole.
The Mercury Micro Computer (MC) is entirely compatible with the Personal PCs for all commonly available software. After the incident of the special monitors that supplies by outsiders, all of its other feathers, built-in software, communication, high tech design and PC compatibility, seems attractive for consumers. The forecasting sales volume is 5000 units and manufacturing 1000 units in Montreal and left 4000 units on Toronto. However, since the requirement number and prices of EWU (Equivalent Work Units) are different in these two factories, this would lead different results of net incomes. The original distribution – 1000 units made on Montreal and 4000 units made on Toronto will lead to a loss for the company, the original calculation is shown in the following:
EWU (Montreal): 30*$8.5 = 255
EWU (Toronto): 20*49.05 = 981
Montreal Made
(1000 units)
Toronto Made
(4000 units)
Revenue ($2,800/unit)
$2,800,000
$11,200,000
EWU
($255,000)
($3,924,000)
Direct Material (851/unit)
($851,000)
($3,404,000)
Recover Costs(700/unit)
($700,000)
($2,800,000)
Overhead (450/u)
($450,000)
($1,800,000)
$544,000
($728,000)
This relates to the budgeting problem, how to reasonably distribute the production within restrict of total 120,000 EWUs, this can either calculate by solver using Excel or list two equations. The basic principle is