... the actual factory cost from the previous year . When the company started there were only two other companies that were able to make similar tools , but over the last two years other companies have developed the capacity to make high quality tools and the company now faces stiff competition . Profitability: there has been a sharp drop in turnover and profits, particularly in 2004 and 2005 .The Company expect this trend will continue unless they take action to identify and eliminate the causes Extracts from the Profit & Loss Accounts for the Sidcap Aviation Limited For year ended 31st December (GBP' 000s) 2001 2002 2003 2004 2005 Sales 20,000 22,000 23,000 21,000 18,000 Direct Materials 2,760 3,036 3,174 2,898 2,484 Direct Wages 11,040 12,144 12,811 11,813 10,488 Factory Overhead 4,600 4,876 5,069 4,848 4,545 Factory Cost of Sales 18,400 20,056 21,054 19,559 17517 Operating Profit 1,600 1,944 1,946 1,441 483 Notes to Profit & Loss Accounts: * The mix of jobs undertaken by the company over the years has remained the same * Both the basic wages and overtime premium for the direct labour are treated as direct ...

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