=+15-36 KKK Balanced scorecard OBJECTIVE 3 Lee Ltd manufactures various types of colour laser printers in a

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=+15-36 KKK Balanced scorecard OBJECTIVE 3 Lee Ltd manufactures various types of colour laser printers in a highly automated facility with high fixed costs. The market for laser printers is competitive. The various colour laser printers on the market are comparable in terms of features and price. Lee Ltd believes that satisfying customers with products of high quality at low costs is key to achieving its target profitability. For 2015, Lee Ltd plans to achieve higher quality and lower costs by improving yields and reducing defects in its manufacturing operations. Lee Ltd will train workers and encourage and empower them to take the necessary actions. Currently, a significant amount of Lee Ltd’s capacity is used to produce products that are defective and cannot be sold. Lee Ltd expects that higher yields will reduce the capacity that it needs to manufacture products. It does not anticipate that improving manufacturing will automatically lead to lower costs because it has high fixed costs. To reduce fixed costs per unit, Lee Ltd could lay off employees and sell equipment, or it could use the capacity to produce and sell more of its current products or improved models of its current products.

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Cost Accounting A Managerial Emphasis

ISBN: 9781442563377

2nd Edition

Authors: Monte Wynder, Madhav V. Rajan, Srikant M. Datar, Charles T. Horngren, William Maguire, Rebecca Tan

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