Abc Company - 1
Randall K. Howell
ACC 206: Principles of Accounting II
March 4, 2013
The ABC Company is a manufacturing firm that specializes in making cedar roofing and siding shingles, introducing the new project to build cedar dollhouses by shingle scrap materials for reaching $3 million annual sales within the next 3 years. Explain the overall risk profile of the ABC Company based on current economic and industry issues. In order to help out the CEO I prepare reports that will contain the information regarding the project. These statements refer to the accompanying Excel spreadsheet as well as word documents. The statements are; Cash Flow statements, Product Cost, Net present value, Depreciation, Contribution Margins …show more content…
Generally the new project requires the additional labor for manufacturing. The demand for added resources has been point as develops its infrastructure. While it seems like an unusual vibrant in current economy manufacturing companies around the world have been struggle with stock up an aging workforce since product prices initially started to rise (Wayne Jansen, 2011).
a. What are the major risk factors that you see in this project?
The major risk factors that I have seen in this project is Cost escalation and shortage of labor. The Cost escalation is an uninspired of added risks in the manufacturing industry. When product prices are high, investors can comprehend the report and believe that manufacturing companies are producing the returns. In fact, high prices inspire supplementary movement and increase demand and costs for labor and supplies. The shortage of labor is also a risk in this project because the existing labor work on the pre-started projects and manufacture cedar shingles, the additional project requires more labor when they manufacture cedar dollhouses through the shingle scrap materials.
b. As the controller and a management accountant, what is your responsibility to this project?
As the controller and a management accountant the responsibilities to this project are proposed and planed for exercise by managers within the organization,