Red Canners
Red Brand Canners
On Monday, June 10, 2013, Mr. Mitchell Gordon, Vice-President of Operations, asked the Controller, the Sales Manager, and the Production Manager to meet with him to discuss the amount of tomato products to pack that season. The tomato crop, which had been purchased at planting, was beginning to arrive at the cannery, and packing operations would have to be started by the following Monday. Red Brand Canners was a medium-size company which canned and distributed a variety of fruit and vegetable products under private brands in the western states.
Mr. William Cooper, the Controller, and Mr. Charles Myers, the Sales Manager, were the first to arrive in Mr. Gordon's office. Dan Tucker, the Production Manager, came in a few minutes later and said that he had picked up Produce Inspection's latest estimate of the quality of the incoming tomatoes. According to their report, about 20% of the crop was Grade "A" quality and the remaining portion of the 3,000,000-pound crop was Grade "B".
Gordon asked Myers about the demand for tomato products for the coming year. Myers replied that they could sell all of the whole canned tomatoes they could produce. The expected demand for tomato juice and tomato paste, on the other hand, was limited. The Sales Manager then passed around the latest demand forecast, which is shown in Exhibit 1. He reminded the group that the selling prices had been set in light of the long-term marketing strategy of the Company, and potential sales had been forecasted at these prices.
Bill Cooper, after looking at Myers' estimates of demand, said that it looked like the Company "should do quite well (on the tomato crop) this year." With the new accounting system that had been set up, he had been able to compute the contribution for each product, and according to his analysis the incremental profit on the whole -tomatoes was greater than for any other tomato product. In February, after Red Brand had signed contracts agreeing to
On Monday, June 10, 2013, Mr. Mitchell Gordon, Vice-President of Operations, asked the Controller, the Sales Manager, and the Production Manager to meet with him to discuss the amount of tomato products to pack that season. The tomato crop, which had been purchased at planting, was beginning to arrive at the cannery, and packing operations would have to be started by the following Monday. Red Brand Canners was a medium-size company which canned and distributed a variety of fruit and vegetable products under private brands in the western states.
Mr. William Cooper, the Controller, and Mr. Charles Myers, the Sales Manager, were the first to arrive in Mr. Gordon's office. Dan Tucker, the Production Manager, came in a few minutes later and said that he had picked up Produce Inspection's latest estimate of the quality of the incoming tomatoes. According to their report, about 20% of the crop was Grade "A" quality and the remaining portion of the 3,000,000-pound crop was Grade "B".
Gordon asked Myers about the demand for tomato products for the coming year. Myers replied that they could sell all of the whole canned tomatoes they could produce. The expected demand for tomato juice and tomato paste, on the other hand, was limited. The Sales Manager then passed around the latest demand forecast, which is shown in Exhibit 1. He reminded the group that the selling prices had been set in light of the long-term marketing strategy of the Company, and potential sales had been forecasted at these prices.
Bill Cooper, after looking at Myers' estimates of demand, said that it looked like the Company "should do quite well (on the tomato crop) this year." With the new accounting system that had been set up, he had been able to compute the contribution for each product, and according to his analysis the incremental profit on the whole -tomatoes was greater than for any other tomato product. In February, after Red Brand had signed contracts agreeing to