BFBS, LLC. CCustom Essay

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BFBS, LLC. Denys C. began a manufacturing organzation, BFBS, LLC., in 2003. The firm specializes in natural hair care products. Most clients are mid-sized national and international retailers who have highly developed in-house marketing departments. BFBS has proved to be highly successful in the past primarily because of the strong personal attention given to the clients by the project managers. Since inception, BFBS has expanded into four regional segments; North/South America, Europe, and Asia. The home office is in North America. However, in the current year losses have been incurred. Each office is headed by an office manager who is responsible for all activities in that office. The managers are paid a reasonable salaries plus a bonus with two inputs. The first input is the net income of the manager’s office and the second is the sharing of a portion of the overall company profits. Managers have a high level of independence to make decisions and are held accountable for the results. Each office is allocated a portion of the non-traceable fixed costs of the organization that are common to all offices. The current year’s segmented operating results are shown in this excel spreadsheet: Responsibility Segmentation Analysis. Case assignment expectations: Review the information from the modular background. Use the appended spreadsheet to evaluate this organizaiton. You will need to fill in the inputs based on the numbers. The spreadsheet should be used to do the calculations. LENGTH: 2-3 pages typed and double-spaced: The following items will be assessed in particular: Note: Cost of Goods sold and Transportation Expenses are both variable; all other costs are fixed. Discuss the advantages and disadvantages of the format present in the excel spreadsheet Responsibility Segmentation Analysis. Explain the allocation method used to distribute corporate expense. Is this an effective allocation method? Why or Why not? Construct a contribution statement showing each segment using the information from the spreadsheet. Include percentages in a separate column for common size analysis purposes. Also, add a total corporation column showing percentages in a common size analysis format. As the CFO (Chief Financial Officer) of BFBS what suggestions would you make to Denys C. and management to improve the performance of the organization.

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