Abstract
The management committee, composed of department heads, sat around the boardroom table. The CEO had called them together at 10 minutes’ notice to hear what I had to say, and it was apparent they resented the short notice.
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Notes
- 1.
Contribution refers to the amount left over after deducting the cost of purchases (in this case, ingredients) from the sale price.
- 2.
Unit refers to a production- or man-hour.
- 3.
In this case, the “unit” of activity is a man-hour. There are numerous activities taking place in most businesses, but there is a key driving activity fundamental to the rest; in manufacturing, a unit of that activity will normally be a production-hour (whether by man or machine). In retailing it will be an invoiced sale or a cash ring-up.
- 4.
Calculated from 25 persons to a shift times 12 hours at the rate of 10,000 pies an hour.
- 5.
Table 1-2 illustrates a simple format for tracking weekly results for comparison with target.
- 6.
“Unit” here refers to an hour of the representative’s time.
- 7.
Although paid by the company, auditors check the accuracy and integrity of the financials on behalf of the company’s shareholders and lenders. If they undertake management advice for the company they audit, they tread a fine line between the role of auditor and adviser, where conflicts of interest can and do arise—a conflict well portrayed in the rise and fall of Arthur Andersen. During an audit, although they are technically well placed to identify actual or potential problems and draw them to the attention of the company, their focus is strictly defined by the audit brief.
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© 2013 Keith N. Cleland
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Cleland, K.N. (2013). Baker Identifies W here the Rubber Meets the Road. In: IMPROVING PROFIT. Apress, Berkeley, CA. https://doi.org/10.1007/978-1-4302-6308-1_13
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DOI: https://doi.org/10.1007/978-1-4302-6308-1_13
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