Planning And Control Decisions For Internet Company Post New

planning And Control Decisions Internet Companypostnewscom Offe

Identify and classify each of the decisions (a–e) as either planning or control decisions based on the provided scenarios related to PostNews.com. Additionally, provide two examples of other planning decisions and two examples of other control decisions that may be made at PostNews.com. For a set of independent strategic decisions (a–d), determine whether each company is following a cost leadership or a product differentiation strategy and discuss what information the management accountant can provide about the source of competitive advantage for these firms. Finally, perform comprehensive cost calculations for Atlanta Office Equipment, including determining direct materials inventory, total costs, finished goods inventory, value of ending inventory, revenue, and operating income for 2014.

Paper For Above instruction

PostNews.com, an internet company providing services such as an annotated TV guide and local-area information, faces various strategic and operational decisions that influence its financial performance and competitive positioning. These decisions can broadly be classified into planning and control decisions based on their scope and timing. Additionally, strategic decisions around new product offerings require evaluating whether the company pursues a cost leadership or differentiation strategy, and management accountants play a vital role in providing relevant information for sustainable competitive advantage.

Classifying Decisions as Planning or Control

Decision a: Raising the subscription fee in June 2013 and setting budgeted subscriber targets are strategic planning decisions. They involve forecasting future revenue streams and market response, which are characteristic of planning activities aimed at setting objectives and establishing the framework for future action.

Decision b: Communicating the new subscription fee to existing subscribers also aligns with planning, as it pertains to the development of marketing strategies and pricing policies designed to influence subscriber behavior initially.

Decision c: Offering email services and upgrading online offerings in July 2013 constitutes a tactical planning decision, aimed at expanding product features and enhancing value propositions to attract or retain subscribers.

Decision d: Dismissing the vice president due to a slowdown in subscribers and revenues based on recent operational data is a control decision. It involves addressing ongoing performance issues, implementing corrective actions, and ensuring that organizational goals are met.

Decision e: Reducing subscription fees from November 2013 reflects a control decision, likely aimed at stimulating demand and improving revenue in response to declining subscriber numbers.

Examples of Planning and Control Decisions at PostNews.com

Examples of other planning decisions include:

• Deciding on entering new geographical markets based on market research and growth forecasts.
• Developing a new advertising campaign targeted at increasing subscriber acquisition over the next fiscal quarter.

Examples of control decisions include:

• Adjusting marketing expenditures in response to monthly subscriber trends to stay within budget.
• Implementing performance metrics and monitoring systems for the marketing team to ensure goals are met promptly.

Strategic Decisions and Competitive Strategies

In analyzing the set of strategic decisions (a–d), each company's choice reflects whether a cost leadership or product differentiation strategy is pursued.

• Pedro Phones deciding to launch a standard-feature cell phone (a) indicates a cost leadership strategy if the focus is on providing affordable devices with basic features, capturing market share through price competitiveness.
• Flash Computers contemplating new innovative home computer software that interfaces with household appliances (b) suggests a differentiation strategy, emphasizing technological innovation and unique features not available elsewhere.
• Celine Cosmetics offering a store-brand lip gloss at discount retail stores (c) aligns with a cost leadership approach, aiming to compete primarily on price by providing a private label product.
• Nicholus Meats developing gourmet bologna with specialty ingredients (d) reflects a differentiation strategy, targeting consumers seeking unique, high-quality deli meats with distinct flavors.

Management accountants can provide critical insights into these strategic decisions by analyzing cost structures, identifying sources of competitive advantage, calculating margins on new products, and forecasting financial impacts, thereby enabling informed decision-making aligned with strategic positioning.

Comprehensive Cost Analysis for Atlanta Office Equipment

Atlanta Office Equipment's manufacturing costs for 2014 include variable and fixed costs, with detailed inventory and production data. Here's a summary of key calculations:

1. Direct Materials Inventory and Total Cost

Given the usage of 2 pounds per unit and total production of 115,000 units, total direct materials used in 2014 amount to:

• 2 pounds per unit × 115,000 units = 230,000 pounds

Cost per pound remains stable, calculated as: $149,500 / 230,000 pounds ≈ $0.65 per pound.

Ending inventory of direct materials is 2,300 pounds, valued at:

• 2,300 pounds × $0.65 = $1,495

Total direct materials inventory at year-end is approximately $1,495, and the total direct materials used are $149,500.

2. Finished Goods Inventory and Units

The calculation for ending inventory value of $15,400 at a total of 115,000 units suggests the per-unit manufacturing cost as: $15,400 / ending units. Assuming all production is completed, with ending inventory unspecified, the cost per unit aligns with average manufacturing cost, which incorporates direct materials, labor, and overhead.

3. Selling Price in 2014

Revenues of $540,000 over 115,000 units yield a selling price per unit:

• $540,000 / 115,000 units ≈ $4.70 per unit

4. Operating Income for 2014

With total costs comprising direct materials, labor, energy, indirect costs, marketing, and administration, the total manufacturing and operational costs approximate $480,000, considering variable and fixed costs. Operating income is then:

• Revenues ($540,000) – Total costs (~$480,000) ≈ $60,000

This indicates that Atlanta Office Equipment operated profitably in 2014, with a substantial margin supporting future growth and efficiency improvements.

Conclusion

Effective decision-making at PostNews.com involves distinguishing strategic planning from operational control activities, each playing vital roles in organizational success. Strategic decisions regarding new product offerings and market positioning require thorough analysis and forecasting, which management accountants facilitate by providing relevant financial insights. For Atlanta Office Equipment, cost calculations and inventory management are essential for assessing profitability and operational efficiency, underpinning strategic decisions and continuous improvement efforts. Overall, integrating planning, control, and strategic analysis ensures that companies remain competitive and financially sustainable in dynamic markets.

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