Post a listing of recommendations - with full explanations - regarding areas of possible cost savings for Cruisers, Inc. Include recommendations for at least four of the six activities, and your targeted savings is at least $1 million (~ 25%). Be specific and explain how the cost savings will be achieved. I.e., what would Cruisers do differently to achieve each of the cost savings? Focus on activities; focus on the cost drivers. E.g., how can they improve or streamline processes? How might they improve worker performance or efficiency? One useful approach would be to consider the volume of each of the activities and break that down into activities per week or per day and then respond to that. I.e., do those volumes seem excessive, and if so, how could they reduce them?

Please post four activities that can be reduced with their numbers.

 

Predetermined Estimated Annual Cost Rate per Unit of Activity Estimated Total Activity (Cost Driver) Activity $ 135,000 2,140,000 $ 750/order 2,140/setup 250/receipt 180 orders Production order preparation Hull and deck mold setup Raw material acquisition Material handling Quality inspection Clean up and waste disposal Total manufacturing overhead 1,000 setups 2,600 receipts 650,000 50/move 9,000 moves 6,000 inspections 250 loads 450,000 125/inspection 300/load 750,000 75,000 $4,200,000