Assume the role of Belinda Taylor. Think of the concerns raised by the different individuals at the meeting and address each of them. Do you think there is a role in this for an outside consultant? Explain
Popular Toy Company (PTC. grew out of a family business that the Neville family owned and ran from the basement of a large house. PTC currently manufactures over 50 types of plastic toys for various age groups. Belinda Taylor, the controller of PTC, has been concerned about the archaic costing system existing within the company. She approached Joan Neville, the president, to express her concern
Joan listened patiently to Taylor and decided to call a meeting. Taylor suggested that the production and marketing personnel also should be part of the meeting
The following people were invited: John Baxter (general manager), Rita MacDonald (marketing manager) and Peter Lindsay (production supervisor)
The meeting began with Taylor thanking everyone for their time and explaining to them the reason for calling the meeting
Taylor: Thank you all for coming to this meeting at such short notice. As you all know, our competition is getting tougher each day. It is important that we take steps to confront the situation.
Lindsay: I don't see the problem. My men and machines are constantly busy, so we must be doing well
MacDonald: We don't have to panic yet but there are signs that we should think about our future; competition is closing in on us. For example, of late, we have not been getting orders for the more profitable products
Baxter: Our men and machines are busy, but this is no good if all we do is produce and stock the goods in our warehouse. Therefore, I agree with Belinda that we should get our minds together and think about our future
Neville: Where do we begin?
Taylor: I think we should begin with our costing system. In particular, we should implement an activity-based costing system.
Neville: That's easy. Belinda, why don't you call a consultant and have them do the job
Taylor: I don't think that we should hire a consultant. Instead, we should do it ourselves as it will be a valuable learning exercise. We should start with an activity analysis by listing all the activities conducted in our company and all the resources consumed by these activities MacDonald: That sounds complicated. How do you propose to go about this?
Taylor: We would have to get everybody's input regarding what they do
Lindsay: I don't think there is a need to talk to my men. I can tell you all that they do
Baxter: I agree with Peter. There's no need to talk to the boys. They should not
be disturbed from their work. Besides, they may hide certain activities. You may not get an accurate picture from them
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