ABSTRACT
Rugby Processing was a large subsidiary of a very big diversified group, which produced both raw materials and finished products for consumer markets. The company received regular reports from the overseas selling offices of its parent group, but these dealt with the whole of the very diversified product range produced by the group. While market reports were also produced for individual units in the group the time that the main overseas selling office devoted to preparing them, especially for Rugby Processing, was limited. Rugby's main internal objective was to use its capacity to the full, in order to prevent a sharp rise in operating costs. Because of this, the rate of capacity utilisation was carefully monitored. Rugby's accounting system was based on ‘contribution’ and the cost information it provided was very detailed. Most of the raw materials which Rugby used were produced within the UK and their prices were little affected by devaluation.
