New Semester Started Get 50% OFF Study Help! --h --m --s Claim Now

Question Answers

Textbooks

Find textbooks, questions and answers

Oops, something went wrong!

Change your search query and then try again

Result Not Found

Books FREE
Study Help
Tutors
AI Study Planner NEW
Sell Books

Search
Sign In
Register

study help
business
cost management strategic

Cost Management Strategies For Business Decisions 4th Edition Ronald Hilton, Michael Maher, Frank Selto - Solutions

What is a master budget? What are its main components for a manufacturer such as Collegiate Apparel?
Howcould Collegiate Apparel’s president or a company’s board of directors use the budget to influence the future direction of the firm?Would participative budgeting be effective for Collegiate Apparel Company
What are the relationships among organization goals, strategic plans, and a master budget for the coming period?
What is meant by the term operational budgets? List three operational budgets that a hospital would prepare.
Give an example of the effect of general economic trends on sales forecasting in the airline industry.
What is the danger of relying entirely on middlemanagement estimates of sales, costs, and other data used in budget planning?
What is the purpose of a financial planning model? Briefly describe how such a model is constructed.
(Appendix) Explain the differences in the basic philosophies underlying the JIT and EOQ approaches to inventory management.
The chief executive officer of Home Workout Equipment Corporation remarked to a colleague, “I don’t understand why other companies waste so much time in the budgeting process. I set our company goals, and everyone strives to meet them. What’s wrong with that approach?” Comment on the
Give three examples of how the City of San Diego could use a budget for planning purposes.
A budget is also a legal limitation on expenditures of governmental agencies. If governmental employees are asked about their agencies’ needs for the coming fiscal period, what types of biases are they likely to incorporate in their estimates? Why?§ If a company prepares budgeted income
Surveying the accounts payable records, a clerk in the controller’s office noted that expenses appeared to rise significantly within a month of the close of the budget period. The organization did not have a seasonal product or service to explain this behavior. Can you suggest an a xplanation?
Borealis Corporation has established a bonus plan for its employees. An employee receives a bonus if his or her subunit meets the cost levels specified in the annual budget plan. If the subunit’s costs exceed the budget, its employees earn no bonus. What problems might arise with this bonus plan?
Madison County Bank (MCB) has $30 million in commercial loans with an average interest rate of 6. . . iS percent. The bank also has $24 million in consumer loans with an average interest rate of 8 percent.Finally, the bank owns $4.5 million in government securities with an average rate of 7
Pandora Pillow Corporation has just made its sales forecasts for the coming period. Its marketing department estimates that the company will sell 630,000 units during the coming year. In the past, management maintained inventories of finished goods at approximately two months’ sales. The
Ujvari and Company, Ltd. is a large securities dealer in Frankfurt, Germany. Last year, the company made 45,000 trades with an average commission of 210 euros. Small investors are abandoning tthhee 1ma rket, whose volume is expected to decline by 15 percent for the coming year. The firm’svo lume
Tee Op Erpeboues ts ao ine of specialized plastic tubing items. During each of the nexftwo years, it expectst o 325,000 units) The beginning finished-goods inventory is 80,000 units. However, the target ending finished-- goods inventory for eeaac h year is 35,000 units.ing are in inventory.
Lackawanna Products’ management wishes to purchase goods in one month for sale in the next. O January 31, the company has 8,000 digital musipc layiens rtocsk, although sales for the next neih(February) are estimated to total 88, 600 players. Sales for March are expected to equal7 ,00 0000
Visit the Web site for the Beyond Budgeting Round Table at www.bbrt.org. Read about the new management model that some have referred to as beyond budgeting.Required Stage an in-class debate on the pros and cons of traditional budgeting. Should the traditional approach to budgeting be abandoned as
Party Time, Inc., buys plain mylar balloons and prints different designs on them for various occasions. It imports the balloons from Taiwan, so at all times it keeps on hand a stock equal to the balloons needed for two months’ sales. The balloons cost $ .70 each and must be paid for in cash. The
New Jersey Produce Company is preparing its cash budget for July. The following information is available concerning its accounts receivable:Estimated'credit'Sales forvulyinis 72! Met) arenesc,er e:a e Z So pavinine* $380,000 xas %Actual credit salfeors JUN G w...ccccccsssesssssevessssseseseeeeeeeee
Sound Investments, Inc., is a large retailer of stereo equipment. The controller is about to prepare the budget for the first quarter of 20x1. Past experience has indicated that 75 percent of the store’s sales are cash sales. The collection experience for the sales on account is as follows:80
Total Sales in January 20x!$200,000 $260,000 $320,000 Cash receipts in January 20x1 From December sales on account............0.... $ $ $CMM AETV ETA GEIS GENES caedenoocansosetsoucder annseitny From January sales ON ACCOUNT ..........ccccceeees otal Cash recelpicus an wnktiee ceenea: $ $ $b. How
The Wedding Place specializes in custom wedding attire. The average price of each of the bride’s wedding ensembles is $3,200. For each wedding, The Wedding Place receives a 20 percent deposit two months before the wedding, 50 percent the month before, and the remainder on the day the goods are
Poolside, Inc., manages neighborhood pools in Oceanside, Florida. The company attempts to make Estimate of Cash Receipts J vice calls at least once a month to all homes that subscribe to its service. More frequent calls are m de (LO 3) / -during the summer. The number of subscribers also varies
Refer to the original data in the preceding exercise. Poolside’s management estimates that the number Preparation of Budgeted of subscribers in September should fall 10 percent below August levels, and the number of service calls Financial Statements should decrease by an estimated 20 percent.
a. The following information relates to Margolis Industries: [ax ever. x1 3 y) EOQ (Appendix)L/S0 Units required per year... 480,000 (LO 7)Cost of placing an order oo... $150 = 6c Unit carrying cost per year... $400 SS ee Assuming that the units will be required evenly throughout the year, what is
Eclipse Company uses 810 tankloads a year of a specific input material. The tankloads are delivered by rail to a siding on the company property. The supplier is offering a special discount for buyers of large quantities. The schedule is as follows:Quantity Ordered Percentage(tankloads) Discount NOs
Considering the situation in the preceding exercise, suppose that the maximum storage capacity for the company is 50 tankloads.Required What is the optimal order? Demonstrate why.
ThermoTech seeks your assistance in developing cash and other budget information for September, October, and November. On August 30, the company had cash of $6,500, accounts receivable of$437,000, inventories of $309,400, and accounts payable of $133,055. The budget is to be based on the following
Yolinda Gardenware, Inc., manufactures floral containers. The controller is preparing a budget for the coming year and asks for your assistance. The following costs and other data apply to container production:Direct material per container:1 pound Z-A styrene at $.40 per pound 2 pounds Vasa finish
The following information is available for 20x5 for Apollo Products:RememuetdO0 OOO\umnitS) i252 dae nomen Be kaa. Ul tavetlieaiet $740,000 Manufacturing costs:Materials (unit level)icciacncc. cea te teemotetceds. mostneanventamresetiteees $ 42,000 Unit-level (variable) overhead Cash
Vancouver Software Company has just received its sales expense report for January, which follows: Sales Expense Budget Item Amount (LO 3)Sales COMMISSIONS ..........ccccescseeveeesveees $145,000 Sales staff salarieS...2.......cccccssteeeeee 40,000 Telephone and mailing ..............cc0cee 16,200
Java Time, Inc., a manufacturer of coffee mugs, decided in October 20x0 that it needed cash to continue operations. It began negotiating for a one-month bank loan of $100,000 starting November 1, 20x0. The bank would charge interest at the rate of 1 percent per month and require the company to
Triangle Aluminum Company has the following data from 20x5 operations, which are to be used for developing 20x6 budget estimates:REVEmUS(OOOOOR MTS) an mattene eske eee canteirsc a ca $820,000 Manufacturing costs:Meattemelh(Uimh evel) 5% nrc, cineca terete si. uasl aaeveSanass 133,000 Unit-level
Butler Corporation manufactures stereo headphones in Princeton, New Jersey. Brent Dean, director of cost management, is responsible for preparing the company’s master budget. In compiling the budget data for 20x1, Dean has learned that new automated production equipment will be installed on March
Arrow Space, Inc., manufactures specialized ceramic components used in the aerospace industry. The company’s materials and parts manager is currently revising the inventory policy for XL-20, one of the chemicals used in the production process. The chemical is purchased in 10-pound canisters for
oA rrow Space’s controller, Jane Turnbull, recently attended a seminar on JIT purchasing.Afterwards she analyzed the cost of storing XL-20, including the costs of wasted space and inefficiency.She was shocked when she concluded that the real annual holding cost was $19.20 per canister. Turnbull
The expected market growth of 4.6 percent is a critical assumption or parameter of ShadeTree’s expansion MEL Cle decision.a. Compute the expected market growth rate with the following sets of possible growth rates and probabilities.1. Possible growth rates = 10%, 5%, (2%); probabilities = .4, .3,
Quite a number of assumptions or model parameters determine the positive NPV of €2,012,000 in Exhibit 14-9. Among these parameters are the size of the market in year 0, the market growth rate, and ShadeTree’s market share.a. Explain how these parameters affect expected revenues (change each
a. Why did ShadeTree’s analysts extend the ROV analysis without a major competitor to six years? Is this a Decision reasonable approach to the analysis? Why or why not? Makerb. Compute expected NPV values with the following alternative investment model outcomes. (Hint: Draw decision trees similar
How does the proposed investment by ShadeTree Roasters influence the types of information the company should obtain and the analyses it should perform?
What do net present value and real option value analyses imply for the success of ShadeTree Roasters’ long-term decision?
How do ethical considerations appear to hurt ShadeTree Roasters’ investment opportunities in the short run but help in the long run
What is different between a consumption decision and an
How can organizations anticipate and plan for investment decision? uncontrollable external events, such as weather?
How do discounted cash flow (DCF) methods analyze
What are the most common problems that can be investment decisions? discovered during due diligence investigations of
What two types of factors affect strategic investment investment opportunities?decisions?
When might an organization’s financial records be useful
Describe the strategic nature of the investments by for anticipating uncontrollable future events and their RealNetworks, Time Warner, and Benetton described in likelihood of occurrence?Cost Management in Practice 14.1.
Why might creative employees and experienced consultants be good sources of information about uncontrollable future events and their likelihood of occurrence?
What are the advantages of using news, government, foundation, and industry analyses of uncontrollable future events and their likelihood of occurrence?
What are three approaches to modeling the effects of uncontrollable future events and their likelihood of occurrence?
How does expected value analysis summarize what is known about uncontrollable future events and their likelihood of occurrence?
If expected market growth can be either 10 percent or 2 percent with probabilities of occurrence of 30 percent and 70 percent, respectively, what is the expected value of market growth?
Describe the meaning of the amount calculated in review question 14.12 for planning and for actual future market growth.
Why might a company, such as Caterpillar, find advantages to evaluating “bundles” of investment simultaneously rather than singly, as described in Research Insight 14.1?
Describe how ShadeTree analysts forecasted gross margin in Exhibit 14-9.
Explain why analysts added back depreciation expense to compute operating cash flow in Exhibit 14-9.
Explain how nonfinancial qualitative factors might override NPV analysis of investing in improved Internet access (Cost Management in Practice 14.2).
Why should organizations try to anticipate competitors’actions as part of analyzing strategic investments? Give an example.
What is different about real option value (ROV) analysis compared to traditional net present value (NPV) analysis?
How might ROV analysis lead to accepting an investment that traditional NPV analysis says to reject?
Why did ShadeTree analysts extend the decision time frame from five to six years in Exhibit 14—16 (and the appendix)?
Explain how the real option value of an investment is derived from ROV analysis.
Describe three problems that external parties, such as regulatory agencies, have with enforcing ethical investment practices by organizations.
Why might individuals misstate information or results regarding strategic investments?
Describe how internal controls and audits can support ethical investment practices.
Respond to this comment: Net present value analysis is too narrow and excludes important factors in decision making.
If an investment does not fit with an organization’s strategic plan, it is probably not a good idea, even if the NPV is positive. Do you agree or disagree? Explain.
Where would real option value analysis be more useful, replacing a machine with a new model that has a five-year life or replacing a mass-production method with a flexible, JIT production method? Explain.
Respond to this observation in the context of investment decisions: Estimating future cash flows is a nightmare compared to measuring the cost of capital.
The strategic planning group of a large forest products company started with 400 possible strategic investments and then slashed that number to 40 before doing NPV- analysis. Other than NPVs, what criteria do you think this t group might have used to narrow the list from 400 to 40?14.31)
Due diligence investigations include studying the environmental impacts of investment decisions. Name two industries in which environmental impact studies are likely to be very important and two industries in which they are likely to be relatively unimportant.
Sometimes investments with a positive NPV have a negative impact on earnings. For example, investing in certain types of research and development could result in a large expense at the time of investment with the benefits coming years later. Suppose an executive rejects all investments that
The chapter describes how the Italian clothier Benneton and ShadeTree Roasters have included social causes in their strategic plans. Do you think this is a good business practice? Explain.
Contrast the strategic investments by RealNetworks and Time Warner that are described in Cost Management in Practice 14.1. Are you comfortable with both decisions as described? Explain.
ShadeTree Roasters is planning an expansion to central Europe, but the chapter does not discuss contingency plans beyond terminating the investment if a major competitor enters the market. Individually or with a small group, develop a plan C that ShadeTree Roasters might implement if market growth
Expected NPV analysis does not model the risk of investments directly. Discuss how sensitivity and scenario analyses model investment risk. Some experts argue that these analyses are better for modeling risk than adding a higher risk premium to the discount rate for riskier projects. Explain why
Explain how ABC and NPV analyses can be used together to evaluate an investment.
A manufacturer of computer data storage devices wants to replace its mass production method by investing ina flexible, JIT production method. The company plans to spend millions of dollars on new equipment, remodeled more complex than that, ROV analysis can never be facilities, and relations with
Identify two relevant, uncontrollable external events and two possible competitors’ actions that might — Events affect each of the following investment decisions: (LO 2)a. Level3’s decision to install thousands of miles of fiber-optic cable between major cities to support worldwide
Identify two relevant, uncontrollable external events and two possible competitors’ actions for each of — Events the following investment decisions: (LO 2)a. A decision by the State of Texas to replace a state-run prison with one operated by a private corporation.b. Adecision by Community
The City of Aurora is considering an investment that would expand a community center. City analysts forecast the following net cash flows over the next 10 years, after which a major reinvestment is expected.End of Year Net Cash Flow 0 $(400,000) C Fo tH{ Bowognnens 7 ay 2 “60,000 Coz J 3 60,000
Consider the investment decision in Exercise 14.46. What qualitative factors might be critical to evaluating this decision? If the-discount rate is 10 percent, what monetary value of the qualitative factors would make the project financially viable
Tax-exempt Community Health Center is considering opening a new branch office to reduce travel costs incurred by patients and staff. Because the center depends on community support and donations and has no budget excess, it must make wise investment decisions. A financial executive who volunteers
Consider the investment decision in Exercise 14.48. What qualitative factors might be critical to evaluating this decision? If the lowest-cost alternative is $70,000 and if the discount rate is 8 percent, what monetary value of the qualitative factors would make the project financially viable?
Build an Excel spreadsheet to compute a discount rate of 8 percent per year for each requirement.Requireda. Present value of $(5,000) nowb. Present value of $1,500 one year from nowc. Present value of $2,000 two years from nowd. Present value of $1,700 three years from nowe. Present value of $1,500
A firm plans to issue a security (bond) that promises to pay a 10 percent (coupon) rate on the security(face) value of $5,000. At the time of issue, the market (discount) rate for this type of security is 7 percent.S‘7P READSHEET. Build an Excel spreadsheet to compute each requirement.Required
Fish Taco Company (FTC) is planning to open a taco store near new university campus housing. FTC estimates that the current neighborhood’s fast-food market is $200,000 per year, which will double when the new housing is occupied next year. FTC expects to capture 25 percent of the total
Mid-sized Reunion City plans to completely renovate its aging shopping mall. The city depends on sales tax revenues of 3 percent of sales at the mall to fund many city services, but sales at the mall have declined to a current $80 million. Reunion City’s plans call for 20 percent annual growth in
Fish Taco Company (Exercise 14.55) is planning to open a new store that might be affected by the entry of MacBurger into the same market area. FTC could invest in the new store now by buying and improving property. FTC analysts believe there is a 40 percent chance that MacBurger will enter the
Fish Taco Company (Exercises 14.55 & 14.57) is planning to open a new store that might be affected by the entry of MacBurger into the same market area. FTC could defer its decision to invest by one year to learn whether MacBurger will enter the market. FTC analysts believe there is a 40 percent
Furlong Manufacturing is considering investing in a robotics manufacturing process. Purchase and installation of the process will cost an estimated $2,900,000. This amount must be paid immediately.The company expects to dismantle this production process at the end of its seven-year life and salvage
Octopus Garden, Inc., manufactures innovative, trendy toys and gifts. Successful gifts provide a very high rate of return, averaging 16 percent, and the company’s development department has a very good success rate. Marketing research indicates that the latest new toy can be sold for three years
The financial staff of North American Motors used a 30 percent discount rate to analyze a technological improvement that promised to save the company millions in quality-related costs. The financial staff recommended that top management reject the project. Production managers responded by email
Fremont Company plans to replace its customer service computing equipment now to improve service DCF Analysis, and and reduce costs. The county manager has made the following estimates to support the decision.Nonfinancial factors New equipment cost, including installation and training
Rocky Mountain Builders (RMB) prefabricates cabins and storage sheds in a fast-growing part of the country. RMB is considering replacing some of its existing manufacturing equipment now to increase its production capacity and consequent sales. The new equipment also will reduce annual energy
Cowboy Exploration, Ltd, plans to replace some aging but still serviceable oil-field equipment now while it still has a salvage value. The company’s investment analyst has made the following estimates New equipment cost, including installation and training lYo-Qoe-= lao $140,000 Salvage value of

Showing 1800 - 1900 of 3353

First
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Last

Step by Step Answers

Services

Sitemap
Fun
Definitions
Become Tutor
Used Textbooks
Study Help Categories
Recent Questions
Expert Questions
Campus Wear
Sell Your Books

Company Info

Security
Copyrights
Privacy Policy
Terms & Conditions
SolutionInn Fee
Scholarship
Online Quiz
Give Feedback, Get Rewards

Get In Touch

About Us
Contact Us
Career
Jobs
FAQ
Student Discount
Campus Ambassador

Secure Payment

Download Our App

© 2026 SolutionInn. All Rights Reserved