Samuel Miliken\'s company has reported losses from operations for several years.

Question

Samuel Miliken's company has reported losses from operations for several years. Industry standards indicate that prices are normally set at 30% above manufacturing cost, which is where Miliken has set them. Assuming that his other costs are aligned with industry norms and the company uses a process cost system, how could Miliken continue to lose money while his competitors earn a profit?

Imagine you have been hired, based on your considerable experience in the cost accounting field, to gather the necessary information to recommend a course of action to the company's manufacturing managers. Explain where you would begin gathering pertinent information to share. Identify process manufacturing costs that may be causing this situation. Lastly, recommend a course of action to follow.

Explanation / Answer

Regardless of the size of your company, if you hire people to work for you; you need to seriously think about the process you are using to do that. It seems easy enough

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