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Assuming that Power51 overall goal is profitability, what are the companys critical success factors? Explain your answer. (3 marks) ( A critical success factor is
- Assuming that Power51 overall goal is profitability, what are the companys critical success factors? Explain your answer. (3 marks)
(A critical success factor is a variable that meets these two criteria: it is largely under the companys control, and the company must succeed in this area in order to reach its overall goal of profitability)
- Which responsibility-accounting arrangement (for manufacturing plants) is most consistent with achieving success of the companys critical success factors? Explain your answer. (2 marks)
- What responsibility-center designation is most appropriate for the companys sales districts? Explain your answer. (1 mark)
- Suppose that Power51 company often experiences rush orders from its customers. Which of the two proposed responsibility-accounting arrangements is best suited to making good decisions about accepting or rejecting rush orders? Specifically, should the plants be the cost centers or profit centers? Explain your answer. (5 marks)
Pls give at least 800 words and above, tq.
Question One (Total mark: 11 marks, word limit: 1000 words) Power51 Company, which is located in Adelaide, Australia, manufactures electrical cable products. The company's primary product, an especially flexible cable, is among the best produced in Australia. The company operates in a very price-competitive industry, so it has little control over the price of its products. It must meet the market price. To do so, the firm has to keep production costs in check by operating as efficiently as possible. Sam Porter, the company's president, has stated that to be successful, the company must provide a very high quality product and meet its delivery commitment to customers on time. Power51 Company is organized as shown in the following diagram: Power51 Company President and Chief Executive Officer Manufacturing Division Vice President for Manufacturing Sales Division Vice President for Sales 6 Manufacturing Plants 3 Sales Districts There is currently a disagreement between the company's two vice presidents regarding the responsibility-accounting system. The vice president for manufacturing claims that the 6 plants should be cost centers. He recently expressed the following sentiment: "The plants should be cost centers because the plant managers do not control the sale of our products. Designating the plants as profit centers would result in holding the plant managers responsible for something they can't control. A contrary view is held by the vice president for marketing. He recently made the following remarks: "the plants should be profit centers. The plant managers are in the best position to affect the company's overall profit." RequiredStep by Step Solution
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