• Add a section, outlining how you would implement capital budgeting in your company.
• Give example of a decision that you would make using either the IRR or Payback method of analysis. Why would you use this for your business?

Paper

I have decided to develop a Refrigerator manufacturing company.The business manufactures high-end, custom refrigerators. To supply Customers that need high-quality items buy these refrigerators from the company. The business is committed to creating high-quality refrigerators that satisfy client needs and expectations.

• Sales Price: $1875.00
• Total cost: $1500.00
• Supplies: $600.00
• Labor: $400.00
• Overhead: $500.00

Today's refrigerators are made up of a few fundamental parts: the cooling system, the refrigerant, the fixtures, the inner cabinet, or liner, the insulation inserted between the two, and the exterior cabinet and door. Pre-painted aluminum or steel sheet metal is used to make the cabinet and door. Most of the time, people buy the metal in a coil that is either fed into the manufacturing process directly or cut to size and fed sheet by sheet. Like the outer cabinet, the inner cabinet can be made of sheet metal or plastic. The protection that fills the hole between the internal and external cupboards comprises of fiberglass or polyfoam. The parts of the cooling framework, compressor, condenser, coils, blades, are made of aluminum, copper, or a combination. Copper is typically used for the tubing due to its ductility, or ability to bend without breaking. Freon is still the most frequently utilized refrigerant, and the large inside installations as a whole, door and cabinet liners, are produced using vacuum-framed plastic; Small plastic blanks or pre-formed pieces of smaller fixtures like butter compartments, egg trays, and salad crispers are available for purchase.

Factors considered in the manufacturing process:

• Outer cabinet and door
• Inner cabinet
• Cooling system
• Testing and adding accessories
  • By products/Waste
  • Environmental Concerns

Sales price: The refrigerators will cost approximately $1875.00 to purchase. By adding up the costs of direct materials, direct labor, and overhead, plus a 25% mark up this was the price I arrived at. The projected cost of direct supplies is $600, the estimated cost of direct labor is $400, and the estimated cost of overhead is $500. The selling price of the refrigerator then is established using an anticipated total cost of $1,500 for each refrigerator.

Amount of Items Made: The business must manufacture 10 refrigerators to reach the $1875.00 retail price. This was calculated by subtracting the expected cost of direct materials, direct labor, and from the price of the refrigerator $1,500.

• after calculating 25% as profit percentage and to sell each unit at $1875.00, the company needs to produce 10 units.
• To meet the ascertained sale price, 10 units of the products need to be manufactured. This can be computed by adding the profit component of 25% to the total cost of sale.

Costing Method: Absorption and variable costing are the company's preferred costing methodologies. Because it regards all costs, including fixed and variable overhead costs as well as direct material and labor costs, as inventorial or product costs, this system is perfect for a business that manufactures high-end, special-order products. This system enables efficient cost allocation and accurate reporting of sales, marketing, and administration period expenses as well as cost of products sold. This approach provides for the precise allocation of fixed and variable expenses, making it ideal for businesses that make high-end, special-order products. Which within my manufacturing company customers can order customizations. Additionally, this system enables precise reporting of sales, marketing, and administration period expenses as well as cost of products sold.

Variable costing is typically used for internal reporting, whereas absorption costing is typically used for external reporting on a company's financial statements. Regardless of whether a corporation utilizes job-order costing or process costing, both techniques make use of the same data.

Not Selected: Allocation of costs and throughput costing are the costing methods that were not selected. Because it primarily assigns overhead costs and ignores the costs of direct goods and labor, cost allocation is not a good fit for this company. As it is best suited for high-volume, automated production processes, which this company does not have, throughput costing is not a suitable fit for this business.

Ethics: During the 1970s, researchers started to grasp that as gases in the chlorofluorocarbon (CFC) group, which incorporates Freon, float up into the stratosphere they progressively disintegrate. as they do so, releasing chlorine atoms. Polystyrene foam insulation is used to fill the space between the inner and outer cabinets. Because this insulation releases CFCs, which damage the upper ozone layer, researchers are looking for alternatives. Since vacuum insulation is more energy- and space-efficient than polystyrene, it could be used in place of the polystyrene. This type of insulation is also found in thermos bottles.

This poses a problem because each chlorine atom has the ability to destroy tens of thousands of ozone molecules. Ozone is a triatomic form of oxygen that forms a protective layer in the stratosphere and absorbs a lot of solar ultraviolet radiation that would harm animals if it reached the earth's surface. Public pressure to reduce emissions grew as scientists discovered that CFC emissions were worsening the hole in the ozone layer over Antarctica. As another cooler assembling organization it is our obligation to explore an improve ways of safeguarding our current circumstance. In addition to ensuring that the products' prices areappropriately disclosed to the consumer and that the selling price of the product is established in a way that is equitable to the customer and the company are ethical considerations for costing methodologies. Additionally, it is crucial to guarantee that the organization uses the most precise and transparent costing methodology available. It is crucial to make sure that the expenses are calculated correctly and that the customer receives accurate cost reports. Last but not least, it's critical to confirm that the costing strategy employed is consistent with the moral principles of the business.