Part A Decision Making Process followed at Campbell Sports Goods Manufacturers Campbell Sports Goods Manufacturers has been a market leader in making and selling sports goods items in GCC countries. The company has been so successful in the market due to its various key success factors. This company adds value through design of products and processes, production, marketing, distribution, and customer service. Campbell keeps improving its processes through implementing certain innovative processes that eliminate certain non-value adding processes and adding processes that add value to the products being manufactured. It also keeps close contact with its customers to understand them better in terms of their expectations towards sports goods and makes design of their products accordingly. Need for Systematic Decision-Making Process The CEO of Campbell wants to have structural changes in decision making process being followed at Campbell. He feels that the process they follow for making decisions is quite long and time consuming and as result certain opportunities are missed out. Thus, the CEO feels a systematic decision-making process will help Campbell to implement certain decisions on appropriate time resulting in strengthening key success factors. The following model impresses the CEO and wants to implement the following process. identify Context ONGOING ACTIVITY Define Problem El Bacon Cher Identity Analyse Solution Se RM S implement Identify Stalinhados ORIGOING ACTIVITY (Source: www.fhwa.dot.gov) (A) Cost & Inventory Information of Campbell Sports Goods Manufacturers for the year 2020: The cost and revenue details of Campbell company have been summarized and given below the for the year 2020: Information Cost incurred Beginning Closing during 2020 (8) Inventory inventory (8) (As on?" (As on 31" January 2020 Dec 2020) (5) ($) Inventories Inventory - Materials 40,000 50,000 Inventory - Work in Progress 100,000 143,000 Inventory - Finished Goods 100,000 120,000 Direct Materials purchased 1,000,000 Direct Labor 40% of direct material purchased Indirect Manufacturing overheads Materials handling costs 70,000 Lubricants 20.000 Indirect manufacturing labour 40.000 Depreciation on plant & equipment 36.000 Property taxes and insurance on 7.000 equipment Other Operating Costs | Marketing promotions 132,000 Distribution costs 130,000 Customer service costs 128,000 Sales Information Number of Units sold 50,000 units Selling price per unit $ 100 per unit and T) The Company is also providing some cost and sales details about other three products R, S and T as below: Sales Variable Cost Fixed Costs (absorbed using a unit absorption rate) | Profit RST Total 10.000 15.000 20.000 45.000 4.000 0.000 10.000 23,000 3.000 3.000 3.000 9.000 3.000 3.000 7.000 13.000 Required (1) The CEO of Campbell wants to re-structure the existing decision-making process, the management accountant is seriously thinking about implementing five-step decision making process In this context, explain about five step decision making process and explain how this approach can help Campbell to strengthen its key success factors. (20 marks) (2) Prepare Income Statement of Campell Sports Goods Manufacturers for the year 2020 taking information given above in (A). Show the calculations for cost of materials, cost of goods manufactured, and cost of goods sold. (20 marks) (3) Using sales and cost details given above in (B) for products R, S and T, (1) find contribution margin ratio (as a percentage) (5 marks) (ii) find the new contribution margin ratio (as a percentage) if the sales mix of products were to be changed to R-20%, S- 50% and T -30% on Total Sales (15 marks) (20+20 + 20 -60 marks) Part A Decision Making Process followed at Campbell Sports Goods Manufacturers Campbell Sports Goods Manufacturers has been a market leader in making and selling sports goods items in GCC countries. The company has been so successful in the market due to its various key success factors. This company adds value through design of products and processes, production, marketing, distribution, and customer service. Campbell keeps improving its processes through implementing certain innovative processes that eliminate certain non-value adding processes and adding processes that add value to the products being manufactured. It also keeps close contact with its customers to understand them better in terms of their expectations towards sports goods and makes design of their products accordingly. Need for Systematic Decision-Making Process The CEO of Campbell wants to have structural changes in decision making process being followed at Campbell. He feels that the process they follow for making decisions is quite long and time consuming and as result certain opportunities are missed out. Thus, the CEO feels a systematic decision-making process will help Campbell to implement certain decisions on appropriate time resulting in strengthening key success factors. The following model impresses the CEO and wants to implement the following process. identify Context ONGOING ACTIVITY Define Problem El Bacon Cher Identity Analyse Solution Se RM S implement Identify Stalinhados ORIGOING ACTIVITY (Source: www.fhwa.dot.gov) (A) Cost & Inventory Information of Campbell Sports Goods Manufacturers for the year 2020: The cost and revenue details of Campbell company have been summarized and given below the for the year 2020: Information Cost incurred Beginning Closing during 2020 (8) Inventory inventory (8) (As on?" (As on 31" January 2020 Dec 2020) (5) ($) Inventories Inventory - Materials 40,000 50,000 Inventory - Work in Progress 100,000 143,000 Inventory - Finished Goods 100,000 120,000 Direct Materials purchased 1,000,000 Direct Labor 40% of direct material purchased Indirect Manufacturing overheads Materials handling costs 70,000 Lubricants 20.000 Indirect manufacturing labour 40.000 Depreciation on plant & equipment 36.000 Property taxes and insurance on 7.000 equipment Other Operating Costs | Marketing promotions 132,000 Distribution costs 130,000 Customer service costs 128,000 Sales Information Number of Units sold 50,000 units Selling price per unit $ 100 per unit and T) The Company is also providing some cost and sales details about other three products R, S and T as below: Sales Variable Cost Fixed Costs (absorbed using a unit absorption rate) | Profit RST Total 10.000 15.000 20.000 45.000 4.000 0.000 10.000 23,000 3.000 3.000 3.000 9.000 3.000 3.000 7.000 13.000 Required (1) The CEO of Campbell wants to re-structure the existing decision-making process, the management accountant is seriously thinking about implementing five-step decision making process In this context, explain about five step decision making process and explain how this approach can help Campbell to strengthen its key success factors. (20 marks) (2) Prepare Income Statement of Campell Sports Goods Manufacturers for the year 2020 taking information given above in (A). Show the calculations for cost of materials, cost of goods manufactured, and cost of goods sold. (20 marks) (3) Using sales and cost details given above in (B) for products R, S and T, (1) find contribution margin ratio (as a percentage) (5 marks) (ii) find the new contribution margin ratio (as a percentage) if the sales mix of products were to be changed to R-20%, S- 50% and T -30% on Total Sales (15 marks) (20+20 + 20 -60 marks)