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    As Business P2

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    John Raza
    The document discusses Cooper Manufacturing (CM), a company that manufactures consumer goods using labor intensive and flow production methods. It has experienced rising labor turnover in recent years. The Production Director wants to introduce job rotation to address employee boredom. The Finance Director is also analyzing accounting ratios comparing CM's performance to a competitor.

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    As Business P2

    Uploaded by

    John Raza
    34 views1 page
    The document discusses Cooper Manufacturing (CM), a company that manufactures consumer goods using labor intensive and flow production methods. It has experienced rising labor turnover in recent years. The Production Director wants to introduce job rotation to address employee boredom. The Finance Director is also analyzing accounting ratios comparing CM's performance to a competitor.

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    As Business P2 (3)

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    The document discusses Cooper Manufacturing (CM), a company that manufactures consumer goods using labor intensive and flow production methods. It has experienced rising labor turnover in recent years. The Production Director wants to introduce job rotation to address employee boredom. The Finance Director is also analyzing accounting ratios comparing CM's performance to a competitor.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    34 views1 page

    As Business P2

    Uploaded by

    John Raza
    The document discusses Cooper Manufacturing (CM), a company that manufactures consumer goods using labor intensive and flow production methods. It has experienced rising labor turnover in recent years. The Production Director wants to introduce job rotation to address employee boredom. The Finance Director is also analyzing accounting ratios comparing CM's performance to a competitor.

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    © All Rights Reserved
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    PAGE 409

    2 Cooper Manufacturing (CM)

    CM is a public limited company which manufactures a range of consumer goods such as


    washing machines, dishwashers and freezers. CM sells its goods to large retailers who
    operate in the private sector. CM has two factories and each factory uses flow production
    methods. In the past, flow production has helped CM to keep its costs low. Both of the factories
    use labour intensive methods. In each factory employees are given specialised tasks on the 5
    assembly line.

    Labour turnover has been rising in recent years. Over the period 2013 and 2014, CM
    employed an average of 4500 employees. The number of employees leaving in the last two
    years is shown in Table 2 below.

    Table 2: Employment data for CM 10

    2013 2014
    Number of employees leaving 375 450

    John, the Production Director, believes that the flow production method is one reason for the
    rising labour turnover. Employees are reporting that they feel bored at work. John also knows
    that some former employees have taken up employment in a competitor factory where job 15
    rotation is used in the production process. John is planning to develop a proposal about how
    job rotation could be used at CM.

    The Finance Director, Razek, is looking at a summary of accounting ratios comparing CM’s
    financial performance to competitor X. An extract of the data is shown below.

    Table 3: Ratio analysis for CM and competitor X (2014 data) 20

    Ratio CM Competitor X
    Gross profit margin 15% 21%
    Net profit margin 8% 12%
    Acid test ratio 0.85:1 1.89:1

    Razek knows that CM has to find ways of reducing costs to stay competitive. 25

    (a) Explain the following terms:

    (i) private sector (line 3) [3]


    (ii) labour intensive (line 5). [3]

    (b) (i) Calculate CM’s labour turnover for 2014 using Table 2 and other information. [3]
    (ii) Briefly explain one disadvantage to CM of rising labour turnover. [3]

    (c) Analyse the limitations of using accounting ratios, such as those in Table 3, to compare CM’s
    performance with that of competitor X. [8]

    (d) Discuss the advantages to CM of introducing job rotation in the production process. [10]

    © UCLES 2015 9707/21/O/N/15

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