Essay about danshui plant no 2

INTRODUCTION DANSHUI Plant No. 2 is located in southern China was a contract manufacturer that assembled electronic products for companies wishing to save labor costs. DANSHUI was getting a one-year contract with apple Inc. to assemble 2. 4 million iPhones.

To achieve this, DANSHUI can consider the breakeven analysis to determine when a business will be able to cover all its expenses and begin to make a profit. This break-even analysis will shows the amount of revenue that need to be bring in to cover the expenses before a dime of profit have been made.

RECOMMENDATION DANSHUI Company was in unfavorable performance by using standard cost budgeting system consequences of failing to achieve the 200,000 unit per month target. For the short term we recommend DANSHUI to change from using static budget system to the flexible budgeting system for evaluation process.

DANSHUI was getting a one-year contract with apple Inc. to assemble 2. 4 million iPhones. It was very anxious when in the first three months of the contract, the plant is unable to be assembled as many as the expected and its operating at a loss.