Kindly answer the following questions as best as you can. Each question is different, just write...

Kindly answer the following questions as best as you can. Each question is different, just write in your own words as best as you can.

Provide a summary of the Fit Foods, Inc. case.
Please discuss the issue the division managers stated pertaining to increasing expense budgets to meet sales goals?
In hindsight, what were the pros and cons of launching the sports and energy drink division?
Provide your response to how Joe should handle the accounting entries that were identified by junior accountant. As a business consultant, what advice would you give Joe?

Submit your response in 2-3-pages, Kindly write in your own words. An no pictures please.

Expert Solution

This case is about a company which is targeting people who want to have a healthy lifestyle with tasty food. The company named fit food consists of three divisions :

1.cookies and crackers

2.savory snacks

3.sports and energy drinks

The three divisions are relatively autonomous and have their own sales and marketing department , production department, R&D department and a manager who reports directly to the ceo of fit food Inc. In order to satisfy the shareholders division were expected to have a 5% growth rate of sales and profit every year. Further the companies goal and strategy were described in the annual operating plans(AOP). The AOP was set up by the division managers themselves but the actual implementation caused friction between the division manager and the CEO.

This friction became more severe because performance of cookies & crackers and sports & energy drinks were declining in 2008and 2009. The performance goals and the growth rate together with the corresponding bonuses were too hard to to meet according to the division manager.

The unreachable targets caused stress with the division managers who tried to meet the goals in other ways. The sport & energy drinks division managers replaced sales from 2007to 2008 which caused major problems for the company but helped him to get hi bonus. Delayed shipment, scheduling and production problems and wrong accounting numbers were examples of the consequences.

Rahul Sunny answered 2 years ago

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