Axcorian passenger vehicles, Japan is a Japanese automotive manufacturer that specializes in family sedans, trucks, and SUVs. In 1980s, Axcorian passenger vehicles, Japan saw a great opportunity to sell its vehicles om North America. As a result, in 1981 Axcorian Passenger vehicles, Japan started Axcorian Passenger vehicles, Canada a wholly owned subsidiary of Axcorian Passenger vehicles, Japan. Since 1981, the Axcorian Passenger vehicles brand has become very popular in Canada. Many published consumer reports have referred to the Axcorian Passenger vehicles sedan as the safest family car on the road in Canada. The Axcorian Passenger Vehicles are known for lasting several years and many families owned and use theirs for more than 10 years. Other than regular maintenance, Axcorian Passenger vehicles generally do not require major repairs within the first five years. Since the expansion into North America, Axcorian Passenger vehicles, Japan has subsidiaries all over the world, including several European Countries.

In 1981, when Axcorian Passenger vehicles first stated its sales operation in Canada, 100% of the manufacturing was in Japan. In 1990, Axcorian Passenger vehicles opened its first manufacturing facility outside of Japan in Cambridge Ontario.

The Cambridge Ontario Plant would be responsible for manufacturing all the vehicles for the Canadian market. The Majority of the parts are manufactured in hours or outsourced to a third party in Canada. To maintain control, Axcorian Passenger vehicles, Japan has a very efficient inventory control system and traditionally has not involved the Canadian division in deciding how many sparks plugs to Canada every month to ensure that 50% of the next months demand is met. Each vehicle requires four sparks plugs. During 2019, japan suffered from a very significant earthquake that caused sereve damage across the country, including the destruction of the Axcorian Passenger vehicles, Japan manufacturing plant. On December 15, 2019, Axcorian Passenger vehicles, Japan notified the Canadian Subsidiary that it would not be shipping any more sparks plugs to Canada for at least one year beginning January 2020.

On December 15, 2019, Axcorian Passenger vehicles, Canadas Vice President of Operation, Elena Zajac received the notice that Axcorian Passenger vehicles, Japan would not ship any more spark plugs for year and she called an emergency meeting. At the meeting were the production manager, Alain Boulerice and you, the managerial accounting analyst. Elena has asked that you review sales forecasts (Exhibit 1 on page 2) for the following year and determine the monthly amounts of spark plugs purchase and the cash requirements to make these purchases. As soon as the earthquake hit Japan, Alain was worried that something like this could happen, and he took immediate steps to acquire outsourcing quotes. Alain has received quotes from suppliers (Exhibit 2 on page 2) which he brought to the meeting for the review and gave tou a copy of them.

Exhibit 1- Sales Forecast

Planned Car sales per Month (in Units)

Year beginning- January 2020

Jan	Feb	Mar	Apr	May	Jun
6,500	5,500	4,000	4,200	4,500	8000

Jul	Aug	Sep	Oct	Nov	Dec
6,500	5,500	4,000	4,200	4,500	8000

To: Axcorian Passenger vehicles Canada

From: Walks Automotive

Subject: Spark Plugs Purchase

Walks Automotive is a wholly owned subsidiary of TCI Automotive (a German Automotive manufacturer). Walks Automotive has operated under the control of TCI Automotive for 20 years. The company manufactures various engine Paris such as cylinders, pistons, spark, plugs and valves. These parts are primarily manufactured for TCI Automotive Canada. However, Walks Automotive has recently expanded and supplies other automotive manufactures in Canada. Walks Automotive makes top quality a priority and will only provide tope quality products.

Pricing $ 24.99 (per unit)

Guarantee: Each Spark plug comes with a one-year guarantee. The Guarantee period begins when the vehicle is delivered to the customer. The dealer will be responsible for replacing any defective spark plug and filling a claim with Walks Automotive for reimbursement.

Delivery Time: Each shipment will be delivered within 30 days of purchase. If the delivery data is not met, walks Automotive will deliver the shipment free of charge.

Payment Terms: Pay on Delivery

Quote # 2:

Sparks INC,

Sparks Inc, specializes in the manufacturing of spark plugs, sparks Inc, is based in Florida but ships to anywhere in North America. Sparks Inc has been in operation for three years.

Pricing: CAD $ 13.99 (per unit)

Payment Time 5% of the following outstanding balance when the product is delivered. 30% in the following month, and the balance two months after the purchase is made.

Money Back Guarantee: Sparks Inc, will replace any manufacturing spark plug free of charge got its customer upon initial testing of the engine. If the sparks plug does not work, sparks INC, will replace the spark plug. (Note, the offer is valid within 3 months of purchase)

Delivery Terms: Spark Inc, aims to ensure that each order placed is delivered within 15 days of purchase.