¶ … Superior Manufacturing Company explains the importance of decision making on the basis of future costs rather than the historical projections. The description of the case has distinguished the different types of costs that are involved in taking decisions including variable costs, fixed costs, avoidable cost and unavoidable cots. The case has contrasted the difference between accounting methods based on process costing and job order costing. The case also highlights the importance of a proper succession plan as Superior Manufacturing Company had to face a great deal of difficulties because of not having a proper succession plan. The Superior Manufacturing case study has covered the various aspects of management and accounting. Paul Harvey lacked the required expertise and leadership skills to manage the company of such a large scale hence the performance of the company suffered which was reflected by their financial statements. The financial records held the key to learn from the mistakes of the past and move ahead to attain better results.

Introduction:

The timeline of the case starts with the appointment of Herbert Waters. He was appointed in the year 2005, as general manager of Superior Manufacturing Company. Waters appointment was made by the President Paul Harvey himself. Waters had the required expertise to perform this job effectively and efficiently. He had experience in the management and manufacturing of the products that...

Waters was 56 years old and was at a stage of his career where he had many opportunities to choose from, he chose Superior Manufacturing Company because for him this would be a challenging task and an opportunity to excel even further and mark the end of his career with a solid performance.
Prior to the appointment of Walters there was a number of problems that the management of the Superior Manufacturing Company were facing. The management had collapsed after the death of the founder Richard Harvey who had handled the company quite efficiently. His death meant that Paul Harvey was then in charge of the company. Paul Harvey had a very little experience of working in the company. Four-year experience was not sufficient enough to handle operations at such a large scale. Paul Harvey was only 34 years old and did not have the required maturity and respect to manage such a large organization with an entirely different industrial demand and nature. Paul Harvey was supposed to be the successor of his father Richard Harvey, who had planned to train his son for ten years and then hand the company over to him, but the untimely death of Richard meant that Paul was thrown into the battle ground without a proper succession plan.

Paul Harvey had a clear idea that he was not able to manage the company and there were a number of mistakes that he had made in the year 2004. The poor decision making of Paul Harvey…