Mod 3 SLP 3

Trident University

Osbaldo Camacho

Module 2 SLP 2

ACC501: Accounting for Decision Making

Dr. Ralph Ezelle

February 11, 2018

It is very easy for a company to get caught up in worrying especially if it’s going to do well and forget about the things that make people want to work. In my current workplace there have been increased cases of ergonomic injuries which have affected the company productivity. Having realized this problem within our organization I intend to introduce production of comfortable office chairs locally and globally. The idea is to reduce and prevent ergonomic related injuries that lead to lower productivity, costly injuries and poor product quality. The idea was propelled by increased reported cases in the company counseling department as well as deterioration in the productivity.

Apparently every piece of furniture plays an important part in promoting productivity as well as potential. In this case, I believe that with the right furniture productivity will rise to an entirely new level. Besides, office furniture that is boring makes employees lazy, yet it additionally makes one irritated by the volumes of work on your desk. Literally working in an organization with boring furniture has a lot of implications because to some extent it affects productivity. Also if someone is not able to work properly during the first productive hours of his/her day, there is a likelihood he/she will lack productivity both at home and in social places (Shaked, & Sutton, 1982). Therefore the idea is to improve working environment to improve the health of all workers by preventing ergonomic injuries.

Developing new, quality and standard products is important to withstand stiff competition. However to come up with high quality product, it means investing good capital. In this regard an estimation drawn was drawn on the production of office furniture. From cost point of view, some of the costs that have to be incurred are fixed costs, overhead costs like labor and component costs.

Items	Estimated cost ($)
Overhead costs	12
Components costs	5
Fixed costs	2.5
Labor costs	10
Total costs	29.5

Prices of goods are usually determined by the production cost, market price and market forces that is the power of demand and supply. For this case, the pricing shall range between $35 to $50 depending on both the market and the added values. The pricing is supposed to cover for such logistics as transport and other expenses. The main objective of every business is to make returns thus in order to make sales price should be fair to customers. When the production increases the selling price go down because there are factors that remain constant thus are not affected by mass production (Cheatham, & Cheatham, 2003).

Basing this on rules of economics, production becomes cheaper when quantity produced goes up. However fixed costs like tear and wear will remain constant, labor costs will also go down because the same labor will increase production at a reduced costs and component cost will reduce as well since the purchase shall be done in bulk. From two years projector, the firm production is expected to grow by 15% annually. The profits are also expected to rise in the subsequent years. The aim is to raise the economic status of the organization to a global level a move that will enable it to cover the initial costs.

References

Shaked, A., & Sutton, J. (1982). Relaxing price competition through product differentiation. The review of economic studies, 3-13.

Cheatham, C., & Cheatham, L. (2003). Updating standard cost systems. Westport, Conn:

Dhillon, B. (2013). Life cycle costing: techniques, models and applications. Routledge. Quorum Books.

Jarvaise, J., Drezner, J., & Norton, D. (2016). The defense system cost performance database. Santa Monica, CA: Rand.