Question

For this week’s reflection, please write three complete and well-composed paragraphs (in your own words) in which you use, as an example, a manufacturing company that operates where you live. Write about what you believe the elements of unit costs would be for that business. For example, there is a very small company in my town the manufactures t-shirts for businesses with company logos on them or other designs for special events. Some of the elements that would be included in unit costing would be the cost of the t-shirts purchased before printing and the cost of the dyes used for the printing.

Answer 1

There is a paint manufacturing company in my locality and it is associated with automobile industry and household industry as well. This company is one of the top companies in order of market share acquired in the overall Indian state. There has been a benefit of cost cutting due to prices of oil coming down, which is used by these companies as a part of production process.

These companies uses a lot of chemical and it also uses a lot of other raw material which could be packaging items and it will also include lot of shipment cost as it is a highly capital intensive industry and it will have to produce the goods and services within its premises and it cannot outsource it.

Due to the recent coronavirus outbreak, the sales of this industry has also been impacted and it has shrinked due to a lower consumer demand. However, the cost associated with this companies have been cut to a large extent because oil is an important raw material for the sector and the prices of oil has severely come down so the overall cost of material have also so been down for this company and it will reflect through the margin of its profits, as even if it would not generate enough volume for its products, but it will generate enough margin because it will have a cost cutting benefit associated with its business

So, overall this company is projected to do better in the long run because it has a wide market share and it is catering to an underpenetrated market and it will also gain from the cost cutting and the leadership advantage.