Operations, Manufacturing and Marketing Expenses Term Paper

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Operations at Beam Suntory Company

Beam Suntory is an American manufacturing company that deals in the manufacturing of spirits. It is headquartered in Deerfield, Illinois. The company produces various brands of whisky including Tequila, Scotch whisky, and Irish Whisky among other spirits. Over time, this company has been known for its quality brands and safety standards in its manufacturing endeavor. The company has consequently been the major player in the alcohol industry.

The expenses of the company

There are three main categories of expenses at the company classified as operations expenses, manufacturing expenses, and marketing expenses. The operations expenses are incurred in the course of ensuring the business runs smoothly. This includes the salaries of workers, payment for electricity and water bills and other expenses for an activity that is not directly linked to the content being manufactured, but acting as a support service. Other examples of expenses that fall under this category of operations expenses include overhead costs such as allowances to directors as well as the fuel money for their cars.

Manufacturing costs are those costs that are directly related to the manufacturing process. This includes the costs such as the expenses needed for the purchase of raw materials, purchase of the machinery and equipment used in the process and any other item that will be needed in the manufacturing process.

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These expenses are never ending. They are incurred for as long as the manufacturing process takes place. The good thing with this expense is that the more they are incurred, the more the earnings shall be made. There is a direct relationship between the manufacturing expenses and the profits earned. If the management desires to expand the profit margins, they have to increase the manufacturing expenses. This relates to the raw materials and other factors of production. Profitability is realized when the rise in such factors is lower compared to the sales made.

Marketing expenses is the third category of expenses that are incurred by the company. These are expenses related to the process of making sales. Once the spirits are manufactured, they have to be sold so that profits are realized. Therefore, activities like advertising, distribution, and other product promotion endeavors have to be done. Expenditure on these activities is what makes up the marketing expenses. Any other expense facilitating the sale of the products falls under this category.

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