International Journal Of Business And Management For Ghana

Overview of Manufacturing Firm in Queensland, Australia

Describe about the International Journal of Business and Management for Ghana.

A business has been introduced. The business will be centered on manufacturing unit. Manufacturing is a type of business that uses components, parts or raw materials to make a finished product. The finished goods can be sold directly to the customers. Manufacturing units are a growing entity in the world. The emergences of entrepreneurs around the globe are helping the type of business to grow. It is comprised of machines and tools. Labor is an important aspect in manufacturing firm. We have opened a manufacturing firm that is concerned about making raw materials for car making companies. Our business will make car parts and automobile machineries. The manufacturing process is often termed as fabrication. We are making the business very simple and easy to understand (Kastalli & Van Looy, 2013).  

The business will be set in Queensland, Australia. The place is chosen in Australia, as there is an abundance of car companies in Australia. Ford, Toyota, GM, Volkswagen and Renault are some of the well-known car brands operate in various parts of the country. These companies require multiple car parts and machineries for making the automobiles. The manufacturing plant should be selected for their accessibility. The place should have proper parking facilities, spacious. The weather should be pleasant, as the manufacturing business should not operate from a humid and hot weather condition. The transportation system should be cohesive and properly structured. The time consuming process could be tedious and exciting. Many startup business stops for the excess price and expenses they incur (Asamoah Annan & Nyarko, 2012).   

Unlike merchandising business or hybrid business, manufacturing business buys products for the intention to use them as materials in making new product. A transformation is there in the process. Our manufacturing company will comprise of raw materials, labor and factory overhead in the production process. The manufactured car parts will be delivered to the car making companies. The organization chart will highlight the formal chain of management system. The command and communication between the supervisors and the workers needed to be good. They should help eachother to understand the goals of the firm. Manufacturing firm depends on employee output. The output should be similar every day. The workers should try to overcome the barriers in the manufacturing firm (Needles & Crosson, 2013). We would give the workers all the resources possible. 24 hours electric, water supply, food supply and first aid rooms should be there in any manufacturing unit. In a unit like ours the fours thing should be made mandatory. The machines should be made rust free. Oiling to the machines need to be done on a regular basis. Employee evaluation and job satisfaction are the two parameters we will incorporate in our unit.

Importance of Manufacturing Units

Manufacturing business has been chosen as the area of our business. The economy of a country relies on manufacturing units. The more the number of entrepreneurs the more will be the GDP. It would create more job options for the youths. The foundation of economic stability stands on manufacturing plants. In a country like Australia where the natural resources are present at a good rate, the risk can be taken to start a new business in manufacturing industry. Australia has an abundance of Steel, mines and natural gas. For a car parts making company iron, steel and heavy metals are needed most importantly. Therefore, we thought it would an easy option for us if we choose this stream of business. For running a manufacturing cost, it takes enough funds. We were five people in the group that is why everybody contributed to make the idea to explore. The manufacturing sectors have behind the scene logistics opportunities. The industry knowledge can lead anyone on getting higher knowledge of business. Welding, Fabrication, Assembly, Mechanists and more can train for the skill sets without spending much penny. They can earn substantial living wage. Therefore, manufacturing has a career potential and it has opportunities to earn more than anything else does (Needles & Crosson, 2013).

Financing takes pole position in any business. It can be personal financing or financing from different sources. The finance depends on the type and size of business. In our case, it would take enough funds to make a progress. Processing business is usually capital intensive requires large sum of capital. Investments should be properly made, lot of decisions need to be taken before a lump sum investment. Life insurance also needs to be done for dealing any future frictions. This does not include any term assurance. Personal finance can be profit sharing. In our case, there are six people included so a profit sharing model will be used. We are taking loans from government banks for our finance. We have deposited security to the bank for getting the loan. Mortgage was drawn for getting the loan amount. Venture capital is a type of finance that comes from companies. We have targeted some car making firms. They are giving us advance money for making car parts. It is a venture capital. Generally, they prefer to invest in companies that have received equity investments from the founders and are already profitable.

Career Potential in Manufacturing Industry

Manufacturing overhead is indirect factory related costs that are incurred at the cost of production. It includes labor cost, material cost etc. in our case the number of labors will be more, so the wage and labor cost will be huge. The inventory and cost of goods sold are valued and reported according to the accepted principles accounting. Selling and administrative costs come under non-manufacturing cost. Compensation and occupancy costs and expenses are the depreciation of nonmanufacturing equipment (Grubel, 2014). It expenses for the trucks and automobiles are used for delivering process. Here in our case a plant controller will be there to take the responsibility of coordinating the completion of all plant accounting. At the time of implementing new system, significant business process changes that goes along with the flow. Inventory valuation can track the production of specific jobs. For the valuation, standard cost, FIFO and LIFO methods are used. The comparison of actual cost is incurred to standard budgeted cost. The aspect of manufacturing cost in accounting is necessary. The favorable variance might simply mean that a standard was set to make the process easier. It is bound to be favorable.  The information derived from the analysis can be used as the basis for the annual budgeting. The ultimate responsibility of the work is to dictate the accounting process in an inclusive manner (Beatty & Liao, 2014).

(Source: www.accountingworld.com)

(Source: www.accountingsource.com)

Cost of Goods Manufactured Statement
Cost Element	Decisions	Information required
Material Direct Labor Manufacturing overhead	Supplier*number of orders*order size* Number of factory workers and their wage rate Type of finishing department equipment, order size of materials, factory labor compensation	List prices Quality discounts Carriage cost Cost of order supply Capacity required Wage carrying unit Carrying cost of inventory Overhead cost Variable cost rates

Property plant and equipment are a class of assets. It has a physical existence. A company recognizes fixed costs when it gains control over economic benefits. The benefit can be generated from the assets. The fixed asset is carried on the balance sheet (May, 2013).

Cost of Land includes	Purchase cost, transaction cost, legal fees and registration fees
Cost of Machinery parts include	Permit cost, construction cost, equipment cost and excavation cost
Cost of plant includes	Labor cost, inspection cost, test run cost, purchase cost

Balance sheet projections
Assets	Initial balance	Year 1	Year 2	Year 3	Year 4	Year 5
	Cash and short-term investments	$6,000	$126,532	$97,817	$152,700	$226,378	$179,786
	Accounts receivable	3,000	3,000	3,000	3,000	3,000	3,000
	Total inventory	25,000	25,000	25,000	25,000	25,000	25,000
	Prepaid expenses	0	0	0	0	0	0
	Deferred income tax	0	0	0	0	0	0
	Other current assets	5,000	5,000	5,000	5,000	5,000	5,000
	Total current assets	$39,000	$159,532	$130,817	$185,700	$259,378	$212,786
	Buildings	$100,000	$100,000	$100,000	$100,000	$100,000	$100,000
	Land	100,000	100,000	100,000	100,000	100,000	100,000
	Capital improvements	0	0	0	0	0	0
	Machinery and equipment	100,000	100,000	100,000	100,000	100,000	100,000
	Less: Accumulated depreciation expense	0	40,000	80,800	122,400	164,800	208,000
	Net property/equipment	$300,000	$260,000	$219,200	$177,600	$135,200	$92,000
	Goodwill	$0	$0	$0	$0	$0	$0
	Deferred income tax	0	0	0	0	0	0
	Long-term investments	0	0	0	0	0	0
	Deposits	0	0	0	0	0	0
	Other long-term assets	0	0	0	0	0	0
	Total assets	$339,000	$419,532	$350,017	$363,300	$394,578	$304,786
Liabilities	Initial balance	Year 1	Year 2	Year 3	Year 4	Year 5
	Accounts payable	$2,000	$2,000	$3,000	$3,000	$1,500	$1,500
	Accrued expenses	0	0	0	0	0	0
	Notes payable/short-term debt	0	0	0	0	0	0
	Capital leases	0	0	0	0	0	0
	Other current liabilities	100	100	100	100	100	100
	Total current liabilities	$2,100	$2,100	$3,100	$3,100	$1,600	$1,600
	Long-term debt from loan payment calculator	$80,000	$65,522	$50,320	$34,358	$17,598	$0
	Other long-term debt	$100,000	$200,000	$150,000	$175,000	$225,000	$150,000
	Total debt	$182,100	$267,622	$203,420	$212,458	$244,198	$151,600
	Other liabilities	0	0	0	0	0	0
	Total liabilities	$82,100	$67,622	$53,420	$37,458	$19,198	$1,600
Equity	Initial balance	Year 1	Year 2	Year 3	Year 4	Year 5
	Owner’s equity (common)	$50,000	$50,000	$50,000	$50,000	$50,000	$50,000
	Paid-in capital	250,000	250,000	250,000	250,000	250,000	250,000
	Preferred equity	0	0	0	0	0	0
	Retained earnings	0	(4,990)	(10,303)	(5,059)	(5,520)	(2,714)
	Total equity	$300,000	$295,010	$289,697	$294,941	$294,480	$297,286
	Total liabilities and equity	$382,100	$362,632	$343,117	$332,400	$313,678	$298,886

References

Asamoah, D., Annan, J., & Nyarko, S. (2012). AHP approach for supplier evaluation and selection in a pharmaceutical manufacturing firm in Ghana.International Journal of Business and Management, 7(10), 49.

Beatty, A., & Liao, S. (2014). Financial accounting in the banking industry: A review of the empirical literature. Journal of Accounting and Economics,58(2), 339-383.

Davenport, A. J., Hama, T., Kalagnanam, J. R., Reddy, C. K., & Siegel, S. A. (2014). U.S. Patent No. 8,670,856. Washington, DC: U.S. Patent and Trademark Office.

Garrison, R., Noreen, E., Brewer, P., CHENG, N. S., & YUEN, C. K. (2015). Managerial Accounting: An Asian Perspective.

Grubel, H. G. (2014). A theory of multinational banking. PSL Quarterly Review, 30(123).

Henderson, S., Peirson, G., Herbohn, K., Artiach, T., & Howieson, B. (2013).Issues in financial accounting. Pearson Higher Education AU.

Kastalli, I. V., & Van Looy, B. (2013). Servitization: Disentangling the impact of service business model innovation on manufacturing firm performance.Journal of Operations Management, 31(4), 169-180.

May, G. O. (2013). Financial accounting. Read Books Ltd.

Needles, B., & Crosson, S. (2013). Managerial accounting. Cengage Learning.

Raman, R., Lindsay, V. J., & Everton, N. (2015). Managing institutional differences for international outsourcing success: the case of a small New Zealand manufacturing firm.

Wu, B., Sarker, B. R., & Paudel, K. P. (2015). Sustainable energy from biomass: Biomethane manufacturing plant location and distribution problem.Applied Energy, 158, 597-608.

Yang, Y., Guan, J., Yin, J., Shao, B., & Li, H. (2014). Urinary levels of bisphenol analogues in residents living near a manufacturing plant in south China. Chemosphere, 112, 481-486.