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Business Consultation for Fargo Publishing Company

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Fargo Publishing Company serves the elementary and middle school textbook market. Their printing area is divided into eight production centers that employ approximately 250 hourly workers. Although the production workers may be involved in preparing, running, or packaging several different production runs, they are paid for the total hours worked twice a month. Each day the production employees insert their time cards into a box that prints the time of day as they arrive for work and leave work at the end of their shift. The human resource (HR) department checks the time cards on a weekly basis and manually inputs each employee's time into the payroll computer. At the end of each week, the HR department sends a report to the production departmental supervisors to review and correct. The report frequently comes back with several adjustments. The HR department then makes changes to the payroll data based on the notations on the report. Once the changes are entered, the HR department sends an updated report to the cost accounting department and a second copy to the accountant who maintains the general ledger, prints paychecks, and prepares monthly and annual reports. The cost accounting department uses its copy of the report to prepare a monthly labor cost report.

Due to state budget cuts to education, price competition in the elementary and middle school textbook publishing business has increased steadily over the past decade. Although Fargo has been able to maintain its market share, profits have decreased. Labor costs and processes are thought to be the primary cause for the decrease in profits, but management lacks enough information to identify where the higher labor costs and process inefficiencies originate. Therefore, Fargo's management hired a consulting company to analyze their current time-keeping and payroll system and to prepare recommendations to decrease costs and to improve data collection, processing procedures, and controls.

Prepare several comprehensive recommendations to address the problems described. Explain and justify each recommendation.

Solution Preview

Much needs done to make the payroll system and current time-keeping that is taking place within Fargo Publishing Company. When reading this, I immediately thought that the organization does not have supervisors and managers to oversee the work of their employees, so that they are to get their work done in a productive manner. This would help increase profits within the company itself. For example, supervisors can make sure that their employees get the preparing, running and packaging done faster by setting each employee with goals, such as completing 100 by the end of the day and that one cannot leave until it is complete.

Another area that will help the company is to make sure that departments are used or to have each area divided up in sections. This will allow a person to focus in on getting their work in a faster manner. In order for a company to achieve their goals for the community, the business may need to consider having them come in to work early if they are not accomplishing the goals of the business. In essence, one is able to make sure that deadlines are ...

Solution Summary

This solution did a business consultation in regards to Fargo Publishing Company.