The material cost of the company is associated with the acquisition of Apples at higher rates as the primary materials involved in the production. As compared to the previous year, there has been an increase in production this year which signifies abundance availability of materials. However, with increased material costs that can be attributed to factors such as inefficiency in the production process, increase in the value of ingredients such as honey crisp and brae burn used in production excessive use of resources leading to wastage of the same (Anthony’s Orchard, 2018). The above is accompanied by a reduction in the labor cost that is as a result of the increased workforce and labor hour that were assigned and spent on the processes of inspection of various production stages, peeling, and saucing of the apples.
For the company to cut down on direct material cost used in production and at the same time ensure higher profits, it has to diversify its supply base and maximize on acquiring raw materials and ingredients during the peak season at low prices rather than buying the same when prices are high (Anthony’s Orchard, 2018). Wastage has also to be minimized by ensuring the use of proper and accurate quantities of materials in production. Additionally, for continued profit-making, the firm has to cut costs involved in labor by embracing the use of technology that will offset some of the workers. Few professionals can also be hired when the cost of employing them is high. Occasional but regular training has also to be enhanced for efficiency among the workers. Failure of doing the above will might lead to the company gradually declining in its production quality and output that will ultimately make it collapse. Competition might also become stiff in the industry and force it to make losses instead.
Delegate your assignment to our experts and they will do the rest.
References
Anthony's Orchard. (2018). Retrieved from http://mym.cdn.laureate- media.com/2dett4d/Walden/ACCT/6130/mm/anthony_orchard_website/index.html
Anthony's Orchard. (2018). Retrieved from http://mym.cdn.laureate-media.com/2dett4d/Walden/ACCT/6610/mm/06/AnthonysOrchard/store.htm
