Export Promotion Council Essay Example

Export Promotion Council Essay aExport Promotion Council: the govt. has sponsored a no. of orgn which are specialized in a particular pdt or a grp of pdts amp; their main obj is to promote amp; strengthen exports of such pdt or grp of pdts. They are mainly concern with the problems with their export amp; implementation of export policy in this regard. The imp among them are the EPC’s amp; commodity board. With a view to securing active cooperation of growers, producers amp; exporters in the drive for export promotion, a no of export promotion council has been set up as a non-profit org’s under the Companies Act. All the exporters of pdts coming under the council are entitled to become the members of the council if they wish to claim export incentive amp; assistance provided by the council as per govt policy in force. The govt provides grants under various heads of these councils. Members are charged an annual subscription fee for the service rendered by the council. The members of the council elect a working committee when it elects its chairman amp; other office bearer. All problems amp; policies relating to the exports of the pdts coming under the council are discussed by the working committee amp; the necessary action taken. We will write a custom essay sample on Export Promotion Council specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Export Promotion Council specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Export Promotion Council specifically for you FOR ONLY $16.38 $13.9/page Hire Writer The govt also appoints senior officials to act on working committee amp; guide its deliberations. (i) to assist exporter, (ii) export promotional activities, (iii) delegations of foreign countries, (iv) effective liaison, (v) presenting necessary data to the govt, (vi) foreign offices to help exporters. Thus, the EPC looks after the problems of exports in specific commodities amp; advice the govt, the local authorities amp; public bodies on the policies to be pursued and the steps to be taken to expand the export activities. Economic Integration:  refers to trade unification between different states by the partial or full abolishing of customs tariffs on trade taking place within the borders of each state. This is meant in turn to lead to lower prices for distributors and consumers (as no customs duties are paid within the integrated area) and the goal is to increase trade. The trade stimulation effects intended by means of economic integration are part of the contemporary economic  Theory of the Second Best: where, in theory, the best option is  free trade, with  free competition  and no  trade barriers  whatsoever. Free trade is treated as an idealistic option, and although realized within certain developed states, economic integration has been thought of as the second best option for global trade where barriers to full free trade exist. An increase of  welfare  has been recognized as a main objective of economic integration. The increase of trade between member states of economic unions is meant to lead to the increase of the GDP of its members, and hence, to better welfare a goal of any state around the world. This is one of the reasons for the global scale development of economic integration, a phenomenon now realized in continental (ASEAN, the  North American Free Trade Agreement  (NAFTA),  SACN,  European Union  (EU),  Eurasian Economic Community  (EurAsEC) and proposed for intercontinental (Comprehensive Economic Partnership for East Asia  (CEPEA),  Transatlantic Free Trade Area  (TAFTA))  economic blocks. The other objective for the states pursuing economic integration is to stay/become regionally and globally competitive, as the goods in the states outside economic blocks become more expensive (i. . , less competitive). This is the other reason making global economic integration inevitable. FORMS OF INTEGRATION: These differ in the degree of unification of economic policies, with the highest one being the political union of the states. (i) FTA (free trade area) : is formed when at least two states partially or fully abolish custom tariffs on their inner border. To exclude regional exploitation of zero tariffs within the FTA there is a rule of  certificate of origin  for the goods originating from the territory of a member state of an FTA. ii) Customs union: A  customs union  is a type of  trade bloc  which is composed of a  free trade area  with a  common external tariff. The participant countries set up common  external trade  policy, but in some cases they use different import  quotas. Common  competition policy  is also helpful to avoid  competition  deficiency. Purposes for establishing a customs union normally include increasing  economic efficiency  and establishing closer political and cultural ties between the member countries . It is the third stage of  economic integration. Customs union is established through  trade pact. In a customs union, all trade barriers between the member nations are removed like a free trade area. But unlike a free trade area, the member nations of a customs union follow a common external trade policy with regards to the non member nations. For example, the Andean Pact, which came into existence in 1969 and currently consist of Bolivia, Colombia, Ecuador and Peru, could be treated as an example of customs union. The group has tried to remove all the intra trade barriers and has imposed a common tariff of 5 to 20 % on products imported from non member nations. (iii) Common Market: is a step ahead of customs union as far as integration of economies is concerned. In a common market, all the trade barriers between member nations are removed; the member nations follow a common external trade policy with regards to the non member nations; and a free flow of factors of production – labour and capital, is allowed within the common market area. One of the successful examples of common market is the European Union. (i) Economic Union: An  economic union  is a type of  trade bloc  which is composed of a  common market  with a  customs union. The participant countries have both common policies on product regulation,  freedom of movement  of  goods,  services  and the  factors of production  (capital  and  labour) and a common  external trade  policy. Purposes for establishing a economic union normally include increasing  economic efficiency  and establishing closer political and cultural ties between the member countries. Economic union is established through  trade pact. (ii) Political Union : A political union goes beyond the total economic integration of the member nations. In it, all the economic policies of the member nations are unified or are in harmonization with each other under a single government , The EU is on the path of political union as it has come out with a European Parliament, the European Council, the Council of Minister, the European commission and the European Court of Justice

Boston Creamery Essays

Boston Creamery Essays Boston Creamery Paper Boston Creamery Paper RECOMMENDATIONS Management needs to determine which costs can be controlled and which costs cannot be controlled. The variance analysis simply showed that there was an unfavorable variance for manufacturing (99,000 U). Manufacturing Cost of Goods Sold must be evaluated individually because of the underlying facets from just a number. This unfavorable number could be caused by either an increase in price or a waste in using the number of unit materials. The materials variance should be broken down into the price variance and the usage variance. Exhibit 1 shows that variable cost and fixed cost were separated and variance was computed. Variable cost was the main culprit of the increase in cost. Here, we can identify that the increase may mainly be due to the price variance of milk and sugar. Cooperation between John Vance, the corporate controller and Frank Roberts in preparing the variance analysis must exist. Figures to be provided will be free from bias and management can easily detect areas that need to be addressed immediately. Management will obviously not be interested in going through the whole variance analysis process. They can highlight areas which are to be addressed urgently. As per the case, they only wish to see the items that need their concern so that action can be taken the next year, 1974. Boston Creamery must increase advertisements of their products to address the increase in market size. Boston Creamery, Inc. lost 1. 0% market share – from 50% to only 49%, despite the favorable increase in market size variance of $ 167,610. 00 (See Exhibit 2). This was highlighted from the unfavorable result of $ 55,266. 00 of market share variance. This means that the increase in market share did not benefit the Company, and the increase in sales was mainly due to the increase in the price of their products. Company must probe on the competitors, looking into how they were able to gain the increase in market share. For example, if competitors were able to provide better ice cream or were aggressive in advertising their products as opposed to Boston Creamery. The Company must be able to increase advertising efforts and evaluate means to gain the increase in market share. Management must provide a more comprehensive sales mix, breaking down each sales to clearly see which ice cream flavors are selling or not. Use of sales mix variance compares the actual mix sales to the forecasted; we can easily analyze which items have higher profit than the other. As a result, Boston Creamery may want to re-evaluate the contribution margin for the items which are unfavorable. Introducing new flavors which may sell better, or change in selling price, can be done in order to sell the product. Looking at Exhibit 3, we can see that despite the favorable outcome of the sales quantity, this did not translate to a favorable sales mix. This can be attributed to the loss of popularity of the basic flavors (e. g. vanilla and chocolate). BASES FOR RECOMMENDATION One of the factors that contributed to the unfavorable variance in manufacturing cost of goods sold is the increase in labor- cartonizing and freezing (increase of $34,400). Carton handling workers sort daily production each day onto pallets grouped by delivery truck, based on the next day’s sales orders. As stated in the case, the change in the truck loading system lowers cost of factory labor in exchange of a higher cost driver labor for loading the trucks and also frees up some driver time each day. Also, the greater part of the variable unfavorable variance is due to milk and sugar price variances ($57,300 and $23,400 respectively). This should not be held against the manager; rather, it should have been adjusted in the budget. Looking into the items on the schedule for manufacturing cost of goods sold, the uncontrollable costs were Milk and Sugar. A professional relationship can exist between John Vance and Frank Roberts, wherein they can benefit from one another. The fluctuating costs of sugar and milk might not be subject to control by Boston Creamery if the suppliers or even the market raises the price. Modification can be made when purchasing raw materials, such as buying in high volume and supplier will lower prices per unit. The fixed costs of sales salaries could be controlled by increasing or decreasing the size of the sales force. They need to explore economies of scale, engineering processes, product mix, and so forth. The controllers’ report of sales variance analysis will be more interesting with the help of Frank Roberts; or else the technicality of the computation may affect the management decision – report too boring. Market size increased from the forecasted market of 11,440,000 to 12,180,000 (actual), but was not translated equally to the market share for Boston Creamery. The actual size increased by more than 6%, however, Boston Creamery’s actual market share decreased by 1%. Problem with the forecast was that the Company was complacent on using the same estimate of 1972 actual gallon sales. As stated in the case, 1973 budgeted share was done in October of 1972, since final figure was not available yet. Though sales volume increased from 5,720,329 gallons budgeted to 5,968,000 gallons actual, it did not serve the company well. Boston Creamery must conduct a more accurate market research. Frank Roberts is asked by Jim Peterson to make a short presentation at the next management meeting commenting on the major reasons for the favorable operating income variance of $71,700; problem arises from the operating income variance as it does not show the breakdown of each product the company is selling. Based on the result of the sales mix variance analysis, the management could see the effect of change in the number of units sold from the number of units budgeted to be sold. Company must understand the seasonality of each product and proposed other alternatives to forecast sales, such as a more comprehensive market research. Exhibit 1. Manufacturing Cost of Goods Sold |Â   |Actual |Flexible Budget |Variance | |Variable Costs | |Â   |Â   |Â   | | Dairy Ingredients | 3,679,900. 00 | 3,648,500. 00 | 31,400. 00 |U | | Milk price variance | 57,300. 00 | | 57,300. 0 |U | | | |- | | | | Sugar | 599,900. 00 | 596,800. 00 | 3,100. 00 |U | | Sugar price variance | 23,400. 00 | | 23,400. 00 |U | | | |- | | | | Flavoring (Including fruits and nuts) | 946,800. 0 | 982,100. 00 | (35,300. 00) |F | | Cartons | 567,200. 00 | 566,900. 00 | 300. 00 |U | | Plastic wrap | 28,700. 00 | 29,800. 00 | (1,100. 00) |F | | Additives | 235,000. 00 | 251,000. 00 | (16,000. 0) |F | | Supplies | 31,000. 00 | 35,000. 00 | (4,000. 00) |F | | Miscellaneous | 3,000. 00 | 3,000. 00 | |Â   | | | | |- | | | Subtotal | 6,172,200. 0 | 6,113,100. 00 | 59,100. 00 |U | |Fixed Costs |Â   |Â   |Â   |Â   | | Labor cartonizing and freezing | 425,200. 00 | 390,800. 00 | 34,400. 00 |U | | Labor other | 41,800. 00 | 46,000. 00 | (4,200. 0) | F | | Repairs | 32,200. 00 | 25,000. 00 | 7,200. 00 |U | | Depreciation | 81,000. 00 | 81,000. 00 | |Â   | | | | |- | | | Electricity and water | 41,500. 00 | 40,000. 0 | 1,500. 00 |U | | Spoilage | 31,000. 00 | 30,000. 00 | 1,000. 00 |U | | Subtotal | 652,700. 00 | 612,800. 00 | 39,900. 00 |U | |Total | 6,824,900. 00 | 6,725,900. 00 | 99,000. 00 |U | Exhibit 2. Market Share and Market Size Variance Actual market size | 12,180,000 |Â   | | | | |Budgeted market size | 11,440,000 |Â   | | | | |Actual market share |49% |Â   | | | | |Budget market share |50% |Â   | | | | |Actual sales | 5,968,000. 00 |Â   | | | | |Budgeted sales | 5,720,329. 00 |Â   | | | | |Budgeted contribution margin per unit|0. 530 |Â   | | | | |Â   |Â   |Â   |Â   |Â   |Â   | |Market share variance = |Actual market size in units x |x |(Actual market share budgeted |x |Budgeted contribution margin | | | | |market share) | |per unit | |Â   | (55,266. 00) |U |Â   |Â   |Â   | |Market size variance = |(Actual market size budgeted |x Budget market share |x |Budgeted contribution margin | | |market size) | | | |per unit | |Â   | 167,610. 00 |F |Â   |Â   |Â   | Exhibit 3. Sales Mix and Sales Volume Variance |Actual Sales |Forecasted Sales |Actual Sales Mix |Forecasted Sales Mix |Standard Contribution Margin |Sales Mix Variance |Sales Quantity Variance | |Vanilla | 2,458,212. 00 | 2,409,854. 00 |0. 4119 |0. 4213 |0. 4329 | (24,300. 74) |U | 45,234. 92 |F | |Chocolate | 2,018,525. 00 | 2,009,061. 00 |0. 3382 |0. 3512 |0. 4535 | (35,214. 33) |U | 39,506. 26 |F | |Walnut | 50,124. 00 | 48,883. 00 |0. 0084 |0. 0085 |0. 5713 | (501. 4) |U | 1,210. 93 |F | |Buttercrunch | 268,839. 00 | 262,185. 00 |0. 0450 |0. 0458 |0. 4771 | (2,249. 29) |U | 5,423. 91 |F | |Cherry Swirl | 261,240. 00 | 204,774. 00 |0. 0438 |0. 0358 |0. 5153 | 24,521. 52 |F | 4,575. 41 |F | |Strawberry | 747,049. 00 | 628,560. 00 |0. 1252 |0. 1099 |0. 4683 | 42,725. 00 |F | 12,763. 40 |F | |Pecan Chip | 164,377. 00 | 157,012. 00 |0. 0275 |0. 0274 |0. 5359 | 298. 42 |F | 3,648. 48 |F | |Total | 5,968,366. 00 | 5,720,329. 00 |1. 0000 |1. 0000 |0. 4539 | 5,278. 64 |F | 112,363. 30 |F | |