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Cable Tech Bell Corporation (CTB) operates in the telecommunications industry. CTB has one manufacturing division, the Phone Division.
Cable Tech Bell Corporation (CTB) operates in the telecommunications industry. CTB has one manufacturing division, the Phone Division. The Phone Division manufactures telephones in a large plant in OH. The product lines run from relatively inexpensive touch-tone wall and desk phones to expensive, high quality cellular phones. Brice Youngers, the president of CTB, is not satisfied with the performance of the Phone Division. The financial information for the Phone Division for March is given below. March’s performance is fairly typical of what has been happening over the past two years. Its overall profit performance has been declining. Two years ago, income before income taxes had been about 25% of sales. March’s dismal performance was also typical for what has been happening this year and is expected to continue-unless some action by management is taken to reverse the trend. During March, the Phone Division reported the following results:INVENTORIES:23,00040,000
