Baska Case

MINI CASE #1 – Baska Ltd.

MINI CASE #1 – Baska Ltd.

Kwantlen polytechnic university 

Kwantlen polytechnic university 

ENTR 3120 S50

Tyler stychyshyn

100170670

May 10th, 2016

ENTR 3120 S50

Tyler stychyshyn

100170670

May 10th, 2016

KPU

KPU

Contents

Executive Summary 1

Introduction 2

Issues 2

Variable Cost Issue 2

Environmental Waste Issue 2

Analysis 2

Baska Ltd. 2013 Operating Income/Breakeven Analysis 2

Environmental Waste Analysis 3

Recommendations 3

Variable Cost Recommendation 3

Environmental Waste Recommendation 3

References 4

Appendix A 5

Mini Case #1- Baska Ltd.

Executive Summary

Baska Ltd. has been operating at a loss. In 2013, the loss was $220,000. This has caused concerns in the operations and the future viability of Baska Ltd. This poses a major problem for Baska Ltd. and could result in the eventual shutting down of Baska Ltd.

The major issue concerning the operating costs at Baska Ltd. is the variable costs associated with the production at Baska Ltd. The variable costs annually amount to over 50%. A potential change to the direct materials could result in bringing that percentage down below 50% to 48%.

An issue with the potential new direct materials is an environmental concern due to the new waste that would be produced with the material change. This is a concern, but with the proper due diligence and procedural processes can be protected from any penalties.

My final recommendation for Baska Ltd. is to make the change to the new materials and save on the variable costs annually; as well as take the environmental concerns seriously and do the due diligence needed to create a proper and defensible waste disposal procedures and systems for the new materials.

Introduction

Baska Ltd. is currently operating at a loss due to factors in the operation process. Variable costs of production and production processes have been identified as the source of the operating loss problem. This is a...