See attachment Barbco Engineering Co.: Strategy-Driven Costing and LeanManagement Reading the 2008 financial statements, Barb Lutzs sons
Question:
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See attachment
Barbco Engineering Co.: Strategy-Driven Costing and LeanManagement
Reading the 2008 financial statements, Barb Lutzs sons knew their company was in trouble. Their family-owned California manufacturing company had just experienced a reported loss of $350,000a loss that was approximately one-third of the companys equity. The company is small, with $4-6 million in sales. Although it had sought business with original equipment manufacturers (OEMs), sales are primarily to custom-designed equipment end-users. Sales are obtained through bids based on the custom design characteristics of the parts Barbcomanufactures. The company is now in its second generation of family management and adheres to the same strategy initiated by Barb Lutz, the companys foundermaking sales by adding value to customers equipment. Its foundry-castings business segment is largely outsourced for manufacturing and is not the focus of this case. Barbcos other activity, and now its largest business segment, is themanufacture of uniquely specified steel blades that are bolted to the edges of customers heavy equipment, such as road grader original-equipment blades or earth-moving tractor buckets. Barbcos engineers workwith customers and add their expertise to design the application of tungsten carbide to these add-on blades (called bolt-ons). Their unique tungsten carbide process hardens the edge and saves the equipment from abrasion and wear. The manufacturing process is called tungsten carbide impregnating, or TCing.
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