Samsung Managerial Plan

Document Type:Research Paper

Subject Area:Accounting

Document 1

The company ventured into the electronic market in the year 1969, and it launched its first black and white television on sale in 1970. In the midst of1970s the company invested in more fields that included petrochemicals, washing machines, microwaves, and refrigerators. In the 1980s the company decided to focus more on electronics manufacturing where it started producing tape recorders, VCRs personal computers, and color televisions. This made it start exporting its products to North America. In 1989 the company teamed up with BP, and they started to form Samsung BP chemicals, and it was selling these products into the Korean market. Though it poses major risks, the company has intensified its use in disregard to the exchange hit that occasionally hits it.

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The company is so dependent on foreign debt that is the explanation of its inherent capital discrepancies and it mad it becomes a part of the Korean Chaebols. The company’s strategy is to increase its size in disregard to it ignoring profitability. The company accesses credit through support of the government and its operations into credit markets. The company also secures its finances by the use of debts that are gotten via cross debt guarantee. Therefore the sum of all work-in-process inventories represents the total work in process for Samsung Corporation. As Samsung maintains three components of product costs, it supports the following group of accounts. They are direct materials, manufacturing overheads, and the direct labor. The company ensures that it assigns particular products these accounts as an essential goal for process costing like job costing.

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At Samsung, process costing does assign costs to every department. Manufacturing overhead activities Cost driver Inspection of the produced electronics Number of inspections People that inspect and maintenance of equipment’s Size and number of repairs Individuals that perform record keeping Number of records kept and the number of hours that are used in preparing them Samsung factory management team Salaries, bonus and promotions Electricity, sewer operations and manufacturing facilities and equipment Types and amounts of utilities used Computer and the communication systems for the production process Price, complexity and prices Repairs and inspections Number of repairs and parts Deprecation of manufacturing and production facilities Amortization Insurance and property taxes Number of buildings and equipment’s used Safety and environmental costs Prevention, upgrades, retrofits and first aid activities Salient Activities Manufacturing: ensuring that the inventories that are manufactured in-house are used well in the production of electronics Sales: traveling to different target markets across the globe to present sales pitches to different regions.

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The costs are driven by the salaries, commissions, promotional costs and other miscellaneous expenses Human Resources: these are activities that are involved in training and bringing onboard new employees. Human resources salaries drive the costs, the number of the new employees and the costs involved in designing the training programs. Accounting and Finance: they are engaged in keeping and preparing the financial documents. The costs are driven by the labor hours and the costs of purchasing stationeries and production of the documents. Samsung has managed to keep most of their costs down with an operating margin of 16. 5%, and thus it means the company is 0. 5% off their goal of 16%. The company is on the quest of hedging most of their potential losses, and the company is considering most of the ensuing exchange rates so that it can realize huge profits.

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Costs 1. These costs usually depend on the funds available to be used for investment and the number of funds that Samsung is willing to risk. Inventory and material purchases: these are expenses that are incurred in procuring for materials and the conversion of these inventories into usable materials. Property taxes and insurance costs: these costs are mostly fixed in nature. They depend on the rates that are imposed on Samsung based on the ensuing tax rates and insurance terms. Depreciation costs: these are fixed costs that are based on the useful life of the equipment. Apparently, Samsung brands are primarily novel no matter the competition it receives from Apple. The other portion brings on board individual wholesalers and retailers that trade with Samsung products.

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This segment involves supermarkets, supply chain stores, hypermarkets and departmental stores. The others segments also include other companies that work with Samsung in the promotion of our products, for example, Chelsea football club. The others segment contributes to sales revenue to the extent of 40%. This is to produce the hurdles of gaining popularity quickly which risks unpopularity very quickly. The company recognizes the trends and thus quickly meets the forgoing quick demand. Outsourcing Policies At Samsung, we believe in producing our inventories in-house to reduce outsourcing costs. This can maintain the novelty of products delivered to the markets. Conclusion As we are living in times that are enhancing business transactions, it has made Samsung manage inventory in a way that is going to spearhead better sales and production across the globe.

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