Whale Print Company Case
Whale Printing Company
It was Monday morning and Victor Hussey, president of Whale Printing Company, was considering whether to take on a job at what seemed to him to be a marginal price A half hour earlier Katharine Salter, president of Salter Associates, had called to say she needed 10,000 copies of an advertising brochure by Friday noon. She gave Hussey the specifications and said there had been so many delays in getting the copy ready that her regular printer did not have capacity that week. She said he had previously agreed to do the work for £700 and Hussey could have the job at the same price. She needed an answer within an hour.
Hussey's job estimator had converted the specifications to times for the main operations and produced the estimated cost shown in table 1. Material costs were computed and charged separately. Tables 2 and 3 show an abbreviated version of the annual budget plan and the overhead rate computation.
Three people worked in the lithography department in which copy was converted to plates for the press. Hussey knew that in this week's job schedule were two big jobs to do for regular customers who often prepared copy rather poorly, requiring the litho people to spend extra time solving problems. Though he had done business with Salter only twice in the previous year, those times the copy had been quite well prepared. Thus, as he saw it, the litho department would probably have the capacity to handle Salter's job, but problems with the two big jobs could change that. As an unwritten policy, Hussey did not like to ask the litho people to work overtime unless a real emergency arose.
If he took it, the job would run on one of the three smaller presses. Whale also had a large press that was faster, had more capability, and was more complex to set up. On this Monday the small presses were not fully scheduled for the week.
The other two departments (cut and bind, and packaging) probably had capacity because it was easier to run
It was Monday morning and Victor Hussey, president of Whale Printing Company, was considering whether to take on a job at what seemed to him to be a marginal price A half hour earlier Katharine Salter, president of Salter Associates, had called to say she needed 10,000 copies of an advertising brochure by Friday noon. She gave Hussey the specifications and said there had been so many delays in getting the copy ready that her regular printer did not have capacity that week. She said he had previously agreed to do the work for £700 and Hussey could have the job at the same price. She needed an answer within an hour.
Hussey's job estimator had converted the specifications to times for the main operations and produced the estimated cost shown in table 1. Material costs were computed and charged separately. Tables 2 and 3 show an abbreviated version of the annual budget plan and the overhead rate computation.
Three people worked in the lithography department in which copy was converted to plates for the press. Hussey knew that in this week's job schedule were two big jobs to do for regular customers who often prepared copy rather poorly, requiring the litho people to spend extra time solving problems. Though he had done business with Salter only twice in the previous year, those times the copy had been quite well prepared. Thus, as he saw it, the litho department would probably have the capacity to handle Salter's job, but problems with the two big jobs could change that. As an unwritten policy, Hussey did not like to ask the litho people to work overtime unless a real emergency arose.
If he took it, the job would run on one of the three smaller presses. Whale also had a large press that was faster, had more capability, and was more complex to set up. On this Monday the small presses were not fully scheduled for the week.
The other two departments (cut and bind, and packaging) probably had capacity because it was easier to run