To complement the previous publication, I am going to explain some aspects about the accounting variations in administrative indirect charges, in this sense to calculate the variations in indirect charges you must proceed in the same way as for raw material and direct labor.
The above considerations lead us to presume that the causes that generate the described facts are due to the lack of knowledge of the personnel of the administrative accounting area of the importance of managing the production costs of their products, ineffective control systems, lack of a plan of adjustments to the production process that guarantees a higher yield and productivity.
Based on the situation described above, the weaknesses presented could affect the selling price of orange juice, which could result in the loss of customers and a lower income flow, which would reduce profits and profitability, limiting the company's capacity for new investments.
In other words, the company would be forced to increase the price of orange juice, which would possibly cause a decrease in sales. Likewise, the price increase would lead to non-compliance with the Organic Law of Prices and its administrative ruling.
Therefore, in the search for alternatives that have an impact on the solution of the problem, it is considered pertinent to carry out an investigation framed within the fundamentals that support the production costs, for which it is necessary to offer the company case study, alternative solutions that allow it to be more competitive.