recommendations for a cost system 286093

APEX Company John Maxwell has just gone public and expanded his container business. As a creative and skilled engineer, John develops technologically advanced machinery and moulds, which provide APEX with a competitive advantage. Above aver?age profits come from the technological advan?tages, but only temporarily as competitor imitation takes between six months and one year. John has two tactics for addressing this tech?nology copying. First, he plans and works towards continuously introducing technological improve?ments in processes and products. For example, there is an ongoing goal for production costs to decrease 8 percent a year. Second, APEX stresses new products. For example, there is a policy that 25 percent of the sales each year must come from products introduced in the past five years. APEX is in the plastic products industry, specifically in the rigid packaging sector. Its products include pop bottles, cosmetic jars, beverage cases, dairy cups and tubs, food trays, pails, and oil containers. In the industry, there are constant modifications and improvements in machinery and processes. Technology is becoming an increasingly important competitive factor in productivity as are product quality and perfor?mance. The industry is being pressed to increase the use of higher performance polymer materials, instrumentation, controls and automated materials handling techniques in its processing operations. While these technologies continue to be generally available, they are more demanding in their imple?mentation, and operation and maintenance, reflect?ing a greater need for higher levels of labour and management skills. Such skills are generally scarce. This is not so with APEX. APEX is one of the few Cana?dian organizations that have developed extensive research and development capabilities. The Cana?dian market was not large enough. However, the free trade agreement with United States, and the reduction in the tariff barrier that protected Canadian rigid…