Stewart Box Company
STEWART BOX COMPANY
I. BACKGROUND
Stewart Box is a packaging company that manufactures paperboard and cartons. Its paperboard division sells to external customers and supplies raw materials to the carton division. Outlined in the case are the planning and control systems that Stewart Box has in place.
The paperboard mill and the carton factory were profits centers, where 10 of the 15 production centers under the carton factory are production cost centers while the remaining 5 are service cost centers. The company had a job-cost accounting system.
Mr. Stewart, company president scans the reports. He likewise done close attention to several external reports he received regularly from the industry trade association. It showed current trends and its effects on the industry and sales orders, production volume and other related statistics for all members of the association.
The researcher provided recommendations through plan of actions on how to improve the control systems and planning processes of Stewart Box. Stewart Box is a profitable medium-sized manufacturing company that has several areas for improvement in its accounting, planning, budgeting and pricing methods. The group highlighted these weaknesses and gave proposals as to how the company can significantly improve its operations.
II. POINT OF VIEW
Mr. Robert Stewart - President of Stewart Box Company and a large stockholder
III. ISSUES AND CONCERNS
➢ The paperboard and carton industry is characterized by strong competition because of the potential overcapacity that exists in most plants.
➢ Due to overcapacity, competition for large orders is particularly keen and price cutting is common.
➢ Stewart Box seldom uses contribution pricing for carton orders that were insufficient in number to keep the board mill working.
IV. STATEMENT OF...
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