Introduction Blaze Manufacturing

Written Assignment Unit 4
MBA
UOPeople
BUS 5910 – Management Capstone
Dr Tamu Browne
29 t h Sept 2021

2
Written Assignment Unit 4
Introduction
Blaze Manufacturing (BM), founded 20 years ago, is a small textile manufacturer located
in upstate New York. They do not mass produce inventory items for sale but instead, focuses on
producing goods to fill specific orders from different customers. Their products have relatively
standard layouts catering to different sizes, while customers can customize the colors and styles
of the fabrics. Due to foreign competition, many textile companies in the country are struggling
due to rising costs from wages and environmental regulations, and BM was no exception
(Causseaux, 2016).
Diagnose the cause
BM encountered issues with raising costs, largely due to minimum wage regulation
within the USA. While foreign competitors are not subjected to such regulations and are able to
pay lower wages, which resulted in strong price competition. Additionally, local firms are
subjected to environmental and safety regulations, which are incurred as additional expenses to
the local companies. Therefore, to prevent further loss of clients, BM had to maintain their
competitiveness by reducing their profit margins.
Due to lack of accounting knowledge, management were unaware of the profitability of
the new project. When the new financial controller did an analysis of the new project, it was
making a loss for each product completed. Management accounting helps provide financial
information for decision-making process. Information required includes revenue, sales,
operating expenses which includes both fixed and variable costs.