The Stewart Box CompanyThe Stewart Box Company is a profitable company with a functional structure in place and identified responsibility centers. The company has well-established strategic planning, cost estimates and costing procedures. In an industry where competition is intense due to capacity requirements of production facilities, the company has managed to exploit the market for custom-made cardboard boxes. However, its market is still limited to the 500-mile radius of its manufacturing site, so 15% of the time the company must underwrite costs in order to meet volume requirements for its operations, and 65% of the time costs are set higher than those of their competitors. Additionally, cost estimates established based on prior year data were used to quantify the costs of bespoke jobs which do not accurately capture the actual costs spent on the jobs. To address these issues, the company must put in place measures to encourage its sales force to reach other markets and new customers to meet volume requirements, as well as revalidate its costing procedures to include activity-based costing, which will better capture costs spent on work orders and ultimately improve the company's bottom line. BOX CONTENTS Stewart Box Company is a medium-sized packaging company that produces paperboard and cardboard boxes. It is a profitable operation to stand out from the competition by offering custom-made boxes and delivering on time. The company is functionally structured with identified responsibility centers. However there are still areas for improvement, for example in accounting, budgeting, planning and pricing. Strengths and shortcomings have been identified and proposals for improvement have been highlighted in the Analysis section of this report. PROBLEM DEFINITION In an industry where competition is intense for order volumes, Stewart Box Company has established its own niche market in custom-made boxes for its customers. However, it limited its market to within 500 miles of its manufacturing plant, resulting in underutilization of its plant's capacity. Furthermore, the labor cost procedures in calculating job costs are estimates based on the previous year's values ​​but based on industry prices, its prices are higher in 65% of cases. ANALYSIS FRAMEWORK AND AREAS OF CONSIDERATION Evaluation of the current structure, control systems and strategies to identify the cause of the defined problem. Areas to consider are market penetration, capacity utilization and cost system.