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However, its market is still limited to within the 500mile radius of its manufacturing site, thus 15% of the time the company has to under cost to be able to fulfil the volume requirements for its operation, and 65% of the time they are priced higher than their competitors. Furthermore, cost estimates established based on the previous year’s data were used to cost custom-made jobs which do not accurately capture actual costs spent for the job orders. To address these issues, the company has to put in place measures to encourage its sales force to tap other markets and new customers to fulfil volume requirements, as well as revalidate its costing procedures to include activity based costing, which will better capture costs spent on job orders, and ultimately improve the company’s bottom line...
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