Businessesneed not only strength and endurance, but also flexibility andsensitivity to find development directions when the economy returnsto "new normal".DEVELOPMENT STRATEGIES IN THE T
FOREIGN TRADE UNIVERSITY HO CHI MINH CITY CAMPUS …… ***…… REPORT Class: Managerial Accounting TOPIC: Business Report in PUG Milk Company Group: PUG ( PLUS ULTRA GOAT ) Class: CA-B Course: K60 Lecture: Le Bach Tuan Ho Chi Minh City, 16th May 2022 MEMBERS OF PUG GROUP Huynh Ngoc Kim Cuc - 2142219003 Le Phan Thao Vy - 2142219039 Le Tang Khanh Loan - 2142219097 Le Thi Khanh Nguyen - 2142219098 Trinh Quy - 2142219025 Doan Truong Thanh Binh – 2142219084 Contents INTRODUCTION ABOUT PUG MILK COMPANY VISION MISSION .6 BUSINESS PHILOSOPHY QUALITY POLICY THE COMPANY DEVELOPMENT HISTORY .6 COST CONCEPTS SYSTEMS DESIGN: JOB – ORDER COSTING .11 SYSTEMS DESIGN: PROCESS COSTING .14 COST-VOLUME PROFIT ANALYSIS .14 THE DEVELOPMENT IN THE FUTURE .17 INTRODUCTION ABOUT PUG MILK COMPANY PUG milk company is a startup founded in early 2019 with six cofounder: Khanh Nguyen Khanh Loan Kim Cuc Thao Vy Trinh Quy Thanh Binh Headquarters: Binh Thanh District, Ho Chi Minh City VISION Become one of the most favorite milk brands in our country even international, where people can put their trust in every drop of pure fresh milk MISSION Providing a valuable source of nutritious fresh milk to the community with all our love and responsibility BUSINESS PHILOSOPHY We keep in our mind and our heart that quality and innovation are always our most important companions We act with a customercentered approach and commit to respond to all their needs QUALITY POLICY Always satisfy and be responsible for consumers’ needs by assuring quality, food safety with competitive price, respecting the business ethics and complying with laws THE COMPANY DEVELOPMENT HISTORY It was not long before the PUG company was established when the pandemic broke out, and it became a very volatile period for the company COVID-19 is a harsh test for business and economy which compels company to adapt and change to not only survive but also recover and grow stronger as soon as the pandemic is under control PUG milk company with goals: stabilize production and prevent the disease are implemented At the initial stage of the pandemic in Vietnam, PUG milk company had to find ways to reduce inventory to optimize cash flow But at the time when the disease intensified, disrupting the supply chain and causing input materials to be in short supply, PUG adjusted its strategy to increase inventories to promptly supply production activities Because if keeping inventory at a normal level, it will not meet the plan implementation of the next quarter In addition, PUG has taken advantage of its nationwide production and distribution system to stabilize production even when some localities had to implement social distancing measures One of the most profound and obvious impacts of COVID-19 is forcing businesses to move “from offline to online” PUG’s factories and farms all apply automation and 4.0 technology, ensuring systematic and remote management PUG's supply chain operates entirely on the information technology system, connecting from the input - the purchase of raw materials - to the final output - the product to the consumer The company also equips technologies, tools and software to support communication and remote work including e-Office, online browser system, solutions to help employees access company data from home and digital signatures to ensure smooth operation in the company and with partners even during the "work-from-home" time People - the decisive factor Confronting COVID-19, human issues have become more important than ever The critical issue at this time is to ensure the health and safety of employees to maintain stable business and production amid the pandemic From the beginning of 2020, PUG has established a professional support committee for COVID-19 prevention and control, disseminating information and guiding employees to comply with the preventive measures while being online 24/7 to support problems related to the disease The company also provides employees with preventive tools and nutritional products In addition, PUG also makes employees feel secure to work with full salary and welfare payment policy; enhancing support for employees at “three on-site” units; and proactively supporting employees in testing and vaccination Even when the pandemic is under control, the market picture will never return to the way it was before Businesses need not only strength and endurance, but also flexibility and sensitivity to find development directions when the economy returns to "new normal" DEVELOPMENT STRATEGIES IN THE TIME COVID 19 Based on the knowledge gained during our studies, we have provided accurate data as well as the income statement during this pandemic that we had to follow in order to come up with suitable value for our activities business COST CONCEPTS Direct Materials: Raw materials that become an integral part of the product and that can be conveniently traced directly to it For Example: Milk, Lipid, Lactose, Vitamin Direct Labor: Those labor costs that can be easily traced to individual units of produce For example: Factory Workers, Engineers, Quality Control, Machine Operators, Painters, Raw Materials Delivery People Indirect Labor: Indirect labor is labor that is not directly related to the production of a product Document continues below Discover more Managerial from: Accounting TCHE303 Trường Đại học… 197 documents Go to course Chapter - dsadsa 112 Managerial Accounting 100% (16) Chapter - fddsf 157 Managerial Accounting 96% (25) Chapter - dsa 8 Managerial Accounting 100% (9) Chapter Questions Managerial Accounting 100% (8) Chapter - dsadsa 160 Managerial Accounting 89% (28) Chapter - dssad 117 Managerial Accounting 89% (28) Example: Accountants, Salespeople, Maintenance Personnel, Administrative, Assistants, Marketing Executives, Janitors Manufacturing Overhead Cost: Is the sum of all the indirect costs which are incurred while manufacturing a product Example: electricity or gas used in a factory, other utilities (such as water and trash service), unforeseen repairs or maintenance, rent and property taxes, equipment depreciation… Nonmanufacturing Cost: Are expenditures not associated with product costs Include selling, general and administrative costs, as well as financing costs Support critical parts of a business, such as its sales and marketing activities, and so should not be considered discretionary cost Selling Cost and Administrative Cost: - Selling Cost: Costs necessary to secure the order and deliver the product Example: Distribution costs such as logistics, shipping and insurance costs ; Marketing costs such as advertising, website maintenance and spending on social media ; Selling costs such as wages, commissions and out-of-pocket expenses - Administrative Cost: All executive, organizational and clerical costs Example: Rent, Utilities, Insurance, Executives wages and benefits, Prime Cost and Conversion Cost: Prime Costs: is the sum of direct materials cost and direct labor cost Formula: Prime costs = raw materials + direct labor Conversion Cost: is the sum of direct labor cost and manufacturing overhead cost Formula: Conversion costs = direct labor + manufacturing overhead costs EX: Direct labor and related benefits and payroll taxes Variable Cost and Fixed Cost Variable Cost: Change when activity changes Example: raw materials, piece-rate labor, production supplies, commissions, delivery costs, packaging supplies, and credit card fees Fixed Cost: remain unchanged when activity changes Example: rent and lease costs, salaries, utility bills, insurance, and loan repayments Direct Cost and Indirect Cost: Direct Cost: Is a cost that can be easily and conveniently traced to a specified cost object Example: direct labor, direct materials, commissions, piece rate wages, and manufacturing supplies Indirect Cost: Is a cost that cannot be easily and conveniently traced to a specified cost object Example: production supervisor salaries, quality control costs, insurance, and depreciation The strategy's overview was about the PUG Milk Company's intention to sell milk in 2021, which would be the most difficult moment because of the pandemic Covid-19 Normally, a milk box costs $2.50, but in 2021, we offered milk boxes for just $2 because the facility had reached its manufacturing capacity During the epidemic, some materials were the most difficult to come by As a result, we have a discussion with the firm that provides us with the needed substance in the milk to cope with the lower money for creating and selling milk However, our business partners rejected our offer since the pandemic's materials were restricted, and they couldn't accept it The tables have been updated for the year 2021 and the period covid19 The date may be appropriate for the circumstance based on the statistics SYSTEMS DESIGN: JOB – ORDER COSTING Process costing is used in companies that produce many units of a single product for long periods Examples include producing paper at Weyerhaeuser, refining aluminum ingots at Reynolds Aluminum, mixing and bottling beverages at Coca- Cola, and making wieners at Oscar Mayer These are all homogeneous products that flow through the pro- duction process on a continuous basis Process costing systems accumulate costs in a particular operation or department for an entire period (month, quarter, year) and then divide this total cost by the number of units produced during the period The basic formula for process costing is: Unit product cost = Total manufacturing cost : Total units produced Job-order costing is used in situations where many different products are produced each period For example, a Levi Strauss clothing factory would typically make many different types of jeans for both men and women during a month A particular order might consist of 1,000 stonewashed men’s blue denim jeans, style number A312 This order of 1,000 jeans is called a job In a job-order costing system, costs are traced and allocated to jobs and then the costs of the job are divided by the number of units in the job to arrive at an average cost per unit A bill of materials is a document that lists the type and quantity of each type of direct material needed to com- plate a unit of product The materials requisition form is a document that specifies the type and quantity of materials to be drawn from the storeroom and identifies the job that will be charged for the cost of the materials The form is used to control the flow of materials into production and also for making entries in the accounting records Direct labor cost is handled similarly to direct materials cost Direct labor consists of labor charges that are easily traced to a particular job Labor charges that cannot be easily traced directly to any job are treated as part of manufacturing overhead Workers use time tickets to record the time they spend on each job and task A com- plated time ticket is an hour-by-hour summary of the employee’s activities throughout the day 10 Manufacturing overhead is commonly applied to products using a predetermined overhead rate The predetermined overhead rate is computed by dividing the total estimated manufacturing overhead cost for the period by the estimated total amount of the allocation base as follows: Predetermined overhead rate= Estimated total manufacturing overhead cost: Estimated total amount of the allocation base The predetermined overhead rate is then used to apply overhead cost to jobs throughout the period The process of assigning overhead cost to jobs is called overhead application The formula for determining the amount of overhead cost to apply to a particular job is: Overhead applied to = Predetermined : Amount of the allocation a particular job overhead rate base incurred by the job The PUG company has estimated that 4000 direct labor-hours would be required to support the production planned for the year and that the total manufacturing overhead costs would be $40,000 at that level of activity Consequently, its predetermined over- head rate for the year would be per $10 direct labor-hour, as shown below: Predetermined overhead rate = Estimated total manufacturing overhead cost: Estimated total amount of the allocation base = $40,000 : 40,000 direct labor-hours = $10 per direct labor-hour Overhead applied to = Predetermined * Actual direct labor-hours = $10 per DLH * 3,300DLHs = $33,000 of overhead applied 11 Because overhead is important for businesses for a number of reasons including budgeting and how much to charge their customers in order to realize a profit So when actual direct labor-hour just 3,300 hours less than 4,000 hours prediction It means the PUG company can reduce the expenses for producing each bottle of milk During Covid 19, COGS increased significantly ( will explain detail in chapter 4) which means the PUG company decreased profit (the cost of goods manufactured, other expenses rose dramatically) SYSTEMS DESIGN: PROCESS COSTING The data about equivalent units of production 12 COST-VOLUME PROFIT ANALYSIS What is Cost-Volume-Profit (CVP) Analysis? The CVP analysis is used to ensure information for planning and decision-making such as: choosing problems during the planning of products for sale, expanding or narrowing the production line, and exploitation of production capacities during the expansion or recession economy of the country So that managerial accountants to make plans for the future, they should take information about: Selling prices Sales volume Unit variable costs Total fixed costs Mix of products sold Methods of Cost-Volume-Profit Analysis In the CVP analysis, there are two basic approaches used: Graphic approach and Algebraic approach a Graphic approach: This strategy is highly effective because it exposes the cost-volume-profit relationship in a broader context of business activity (manufacturing and service) In this situation, it gives managers a wider view while planning and making future decisions The graphical technique includes three steps: the profit area, the loss zone, and the equilibrium zone Managerial accountants should plan production quantity, sales price, target profit, and risk threshold based on three categories 13 b Algebraic approach This method incorporates marginal contribution, income statement, and the estimation of several cost-volume-profit elements, such as unit selling price, variable costs for unit, fixed costs of sales, target profit, marginal contribution for unit, and etc Contribution margin = Sales – Variable expense Unit CM = Selling price per unit - Variable expenses per unit Profit = Contribution margin – Fixed expense Profit = (P x Q - V x Q) - Fixed expenses Profit = (P - V) x Q - Fixed expenses Profit = Unit CM x Q - Fixed expenses Profit = CM ratio x Sales - Fixed expenses CM ratio =Contribution margin / Sale Unit sales to attain the target profit = (Target profit + Fixed expenses) / Unit CM 14 Dollar sales to attain the target profit = (Target profit + Fixed expenses ) / CM ratio Unit sales to break even = Fixed Expense / Unit CM Dollar sales to break even = Fixed Expense / CM ratio Business Plan and Application of Managerial Accounting To sum up, a target income of $225000 is desired The calculations on the included calculation document show that to attain the target income the bottles of milk needed will be 602000 The Break-Even point should be $81600, covering 10200 bottles of milk at $8 each, the Contribution Margin will be 4.5 showing that the sales cover the expenses which can be seen as a good opportunity for the company because the return is good THE DEVELOPMENT IN THE FUTURE PUG MILK TOGETHER SUSTAINABLE CHALLENGE OF THE NEW AGE 15 Social development brings many benefits to the community, but it also brings many challenges The whole world is facing many serious problems such as food safety and hygiene, environmental pollution, new diseases, depletion of resources as well as global warming We believe, to limit and solve the above problems, it is necessary to have close cooperation and support of all people and businesses Each individual, each organization is a part of society The development of each individual, each business is also the development of society, and vice versa, the rise of society will also have positive effects on each member in it We need to raise awareness about sustainable development and act responsibly towards the community and society It is necessary and useful work not only for ourselves but also for present society and future generations Quality human resources are the foundation for sustainable development Therefore, PUG milk always focuses on quality and transparency in recruitment The evaluation of candidates is fair, accurate and appropriate based on diverse, effective and quality recruitment sources and is regularly updated to suit the development of the human market and job requirements and needs of the Company PUG MILK DEVELOPMENT RESPONSIBILITIES AND SOCIAL PUG milk has made impressive progress in recent years, becoming one of the largest enterprises in Vietnam and is trying to conquer the international market with the goal of becoming one of the 50 largest dairy enterprises Global And obviously, the company's development is always proportional to its influence on society, especially in Vietnam Deeply aware of its influence on society as well as the challenges facing society as a whole, PUG milk determines the business principle is to harmoniously combine business goals with social responsibility, towards sustainable development We take responsibility for all stakeholders and strive to bring more and more value to our stakeholders 16 In the coming years, the company will begin to conduct transactions between partners with mutually beneficial objectives In particular, minimizing costs while ensuring 100% product quality is a decisive factor for our company The pre-use of objects with the render, fade for the use packaging - Use paper packaging according to Tetra Brick Aseptic Edge technology of Tetra Pak, recyclable and certified packaging - FSC (as a non-profit international organization The Forest Stewardship council awarded) - Product certification brings benefits to environment, economy and society - Deployment to reduce the amount of plastic packaging to reduce weight Plastic umbrellas to the natural environment - Orientation to remove the layer label on the bottle cap of product ICY 5500ml and ICY 360ml, expected to launch in Q2/2019 17 More from: Managerial Accounting TCHE303 Trường Đại học Ngoại… 197 documents Go to course Chapter - dsadsa 112 Managerial Accounting 100% (16) Chapter - fddsf 157 Managerial Accounting 96% (25) Chapter - dsa Managerial Accounting 100% (9) Chapter - Questions Managerial Accounting 100% (8) More from: Phạm Thế Trung… 195 Trường Đại học Ngoại thương Discover more 2021+5 +Answer+sheet+final+exa… Principles of Accounting None 2018 - Final exam123key to students Accounting Information System None International Business 11 International business None 480041487 OM Case12 docx Business Ethics None Recommended for you 2016 BPP Passcard F3 161 Summary Fundamentals o… Managerial Accounting 100% (2) Reading- LT TFNGd 10 nguyên lý quản lý kinh tế 100% (1) Summary Principles of 126 Marketing Kotler complete Marketing for E&BE 98% (172)