Activity-based budgeting, Balanced Scorecard, and strategy Sippican Corporation (B) 12 Refer to…

Activity-based budgeting, Balanced Scorecard, and strategy Sippican Corporation (B)12

Refer to Case 5-36, the Sippican Corporation (A) case, which required time-driven ABC analysis. Sippican’s senior executive committee met to consider the implications from its time-driven ABC model. Frankly all had been shocked to learn that their apparently highest margin product line, flow controllers, could actually be losing money because of its many shipments, short production runs, and heavy use of engineering time. The team contemplated action steps to restore profitability.
After some deliberation, the executive team crafted a new strategy that involved the following principles:

Improve Revenue Quality: Product Focus and Menu-Based Pricing

• Focus on core products: valves and pumps.

• Increase market share in valves by offering discounts for large orders.

• Reduce discounting for pumps, especially in small order sizes.

• Aggressively raise prices for small orders of flow controllers.


• Reduce set-up times.

Based on the new strategy, Peggy Knight developed the forecasted monthly sales and production plan shown in Exhibit 5-12. She wondered whether the shift in product mix, new pricing model, and forecasted productivity improvement in setup times would be sufficient to restore Sippican’s historic margins. Sippican’s machines were leased monthly and had staggered expiration times; Knight believed she could, on short notice, make 10% to 15% adjustments up or down to accommodate changes in demand for machine capacity. Also, Knight felt that she had some flexibility with the size and composition of the labor force as well. The company had recently hired quite a few production employees on short-term contracts to meet the expanded demand for the newly introduced flow controller line.


(a) Estimate the resource demands from Knight’s forecasted sales production plan in Exhibit 5-12.

(b) Prepare a pro forma product line income statement based on the new plan.

(c) Comment on the magnitude of the change in profit with the new plan in relation to the change in production and sales under the previous plan.

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more
error: Content is protected !!