Anthony's Orchard
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It's important that managers understand how costs are reported on the company's financial statements. Review the financial data for Anthony's Orchards for the current year and compare the direct labor costs and direct materials to the previous year. Write a memo to senior management analyzing your findings and provide a recommendation for next year. What would you change based upon your analysis?
To prepare for your memo, use data from the Anthony's Orchards website and compare and contrast the direct labor costs and direct materials.
Your memo should reflect the application of the material presented Required and/or Optional Resources.
A description of your recommendation, a rationale for why it is important, and a description of the consequences of not following the recommendation should be included in the memo.
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TO: Senior Managers, Anthony's Orchards:
FROM: John Anderson
DATE: October, 8, 20xx
SUBJECT: Direct Labor and Materials Costs:
There have been some changes in direct material and direct labor costs between the year 2010 and 2011. It is important that these changes should be brought to the notice of the top management. The changes be analyzed and recommendations made for the next year.
First we consider the direct cost of apples. The cost per thousand pounds of Braeburn applies has decreased from $362 in 2010 to $358 in 2011, however, the average cost of Honeycrisp has gone up from $360 in 2010 to $380.99 in 2011. The increase in the cost of Honeycrisp is substantial at the rate of $20.99 per thousand pounds. Honeycrisp is used in each of the three profit centers namely Prepared Apple ...
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