CASE MATERIALS: THE CLASSIC PEN COMPANY CASE

Case Abstract

The case is designed to help you develop an understanding of how to build an activity-based-costing model and why activity-based-costing may be more appropriate in practice than functional unit-based overhead cost allocation methods. The case requirements ask you to apply overhead and calculate product costs and gross profit using traditional plant-wide overhead allocation methods, assess the accuracy of the costing methodology given the operational environment, apply activity-based-costing concepts to recalculate the product costs and gross profit, and then effectively communicate the results of your analysis, evaluation, and recommendations in the form of a professional written memo.

Case Narrative

Jane Dempsey, controller of the Classic Pen Company, was concerned about the recent financial trends in operating results. Classic Pen had been the low-cost producer of traditional blue pens and black pens. Profit margins were over 20% of sales.

Several years earlier, Dennis Selmor, the sales manager, had seen opportunities to expand the business by extending the product line into new products that offered premium selling prices over the traditional blue and black pens. As a result, five years ago, red pens were introduced. Red pens required the same basic production technology but could be sold at a 3% premium. Last year, purple pens were introduced because of the 10% premium in selling price they could command.

Jane reviewed the financial results for the most recent year and was keenly disappointed. While the new red and purple pens seemed to be more profitable than the blue and black pens, the overall profits were down and none of the product lines were earning profits at the level that the blue and black pens had earned in the past. She is wondering if more specialty pens selling at higher margins should be introduced to boost profits.

The production manager, Jeffrey Donald, was concerned about this approach. “Five years ago, life was a lot simpler. We produced just blue and black pens in long production runs, and everything went smoothly. Difficulties started when the red pens were introduced and we had to make more changeovers. To product red pens, we have to stop production; empty the vats, clean out all remnants of the previous color, and then start production of red pens. Making black pens was easy. We didn’t even have to clean out the residual blue ink from the previous run. It was absorbed in the darker black ink. However, even small traces of either blue or black ink caused quality problems with the red pens and to a lesser extent, with the purple pens.” Jeffrey also reported that the new pens caused more time to be spent on purchasing, scheduling, and tracking.

Operations

Classic produces pens in a single factory. The major task was preparing and mixing the ink for different colored pens. The ink was inserted into the pens in a semi automated process. A final packing and shipping stage was performed manually.

Each product had a bill of materials that identified the quantity and cost of direct materials required for the product. A routing sheet identified the sequence of operations required for each manufacturing process. The information was used to calculate the labor expenses for each of the four products. All of the plant’s indirect expenses were aggregated at the plant level and allocated to products based on direct labor cost. Labor is paid at the rate of $10 per hour.

Indirect costs were estimated as follows:

Fringe benefits were 40% of direct and indirect labor.

About half of the indirect labor resulted from scheduling production runs, which includes scheduling orders, purchasing, preparing, and releasing material for each run. Approximately 40% of the indirect labor was required for the physical changeover from one color pen to another. As noted previously, the changeover from blue to black ink was relatively short (1 hour) while the changeover for the other color pens was much more extensive, particularly for red pens. The remaining 10% of indirect labor was for time spent maintaining records on the four products. This activity was essentially equal for each product.

Most of the computer expense was used to scheduling production runs in the factory and to order and pay for the materials required in each production run. Since each production run was specific to a single customer, the computer time required to prepare shipping documents and to invoice and collect from a customer was also included in this activity. In total, about 80% of the computer resource was involved in the production run activity. The remaining time was used to keep records on the four products, which was essentially equal.

The remaining three categories of overhead expenses were incurred to supply machine capacity to produce the pens. The machines had a practical capability of 10,000 hours of productive time.

Sales and production information for the four product lines is as follows:

Case Requirements

1. Calculate a plant-wide predetermined overhead allocation rate based on direct labor cost and apply overhead to the four product lines. Calculate total product costs for the four lines using the plant-wide allocation rate and show the gross profit rate and unit cost for each.

2. What assumptions are implicit in this company’s method of allocating overhead costs to the product lines? Do you believe these assumptions are supported by the operational procedures described in this case? Discuss.

3. Identify the main activities performed in the production process. Perform a first stage cost allocation and calculate allocation rates for each activity. Comment on your results with respect to the current allocation method. Do you believe that the costs as currently calculated are accurate? Why or why not?

4. Determine the estimated cost of each product line using activity-based-costing and the gross profit rate for each. What can you conclude about the cost accuracy of the two methods? Were costs distorted using a single allocation rate method?

5. As a result of the new cost information calculated, what actions can management take to make this company more profitable? Be explicit.

[1] This case is an adaptation of a Harvard Business School Case 9/17/98.

Answer the following questions to complete Homework

1. Use PubMed or another abstract database  to find an academic journal article on a health topic of interest to you. Read the article to find the answers to these questions: (a) What was the main study question? (b) Who participated in the study, where did it take place, and when was it conducted? (c) What study design was used? and (d) What was the answer to the main study question?

2. Find a recent news story from the popular press about a newly released health research report. Look up and read the scientific article on which the news report was based. Was the news story accurate? Did it leave out any critical information?

3. Do you identify with a particular ethnic group? Do you know of any health conditions that you are at special risk for because of your ethnic background? Are these conditions genetic? Are they related to health behaviors?

4. What are some of the conditions related to poverty that increase the risk of infectious diseases? Noncommunicable disease? Neuropsychiatric disorders? Injuries?

A First Course in Abstract Algebra Chapter S.22, Problem 27E

Let F be a field of characteristic zero and let D be the formal polynomial differentiation map, so that. D(a0 + a1x + a2x^2 + ••• + anx^n) = a1 + 2 • a2x + •••+n• anxn-1, i.e.

F be a field of characteristic zero , D:F[x]→F[x].

C) Find the image of F[x] under D. Is it important which characteristic the field has? Can you explain this enough?

http://www.chegg.com/homework-help/wooden-cubes-size-painted-different-color-face-make-children-chapter-S.22-problem-27E-solution-9780201763904-exc

Use the modified abstract below to answer the following question: OBJECTIVES: The human immunodeficiency virus (HIV) and M. tuberculosis co-infection is a major global challenge. It is not properly clear why some HIV-positive people are co-infected with tuberculosis (TB) while others are not. This study answered this question. METHODS: This case-control study was conducted in Tehran, Iran, in June 2004, enrolling 2388 HIV-positive people. Cases were selected from those who were co-infected with TB and controls from those without TB. Multiple logistic regression analysis was performed to assess the association between M. tuberculosis/HIV co-infection and several predictors. RESULTS: In this study, 241 cases were compared with 2147 controls. Sex, age, marital status, educational level, imprisonment, smoking, narcotic addiction, route of HIV transmission, previous TB infection, isoniazid preventive therapy (IPT), antiretroviral therapy (ART), and CD4 count were independently associated with M. tuberculosis/HIV co-infection. However, after adjusting for all other variables in the model, only the association between M. tuberculosis/HIV co-infection and the following predictors were of importance: imprisoned (OR=3.82), previous TB infection (OR=5.54). CONCLUSIONS: Conclusions: Several predictors are associated with M. tuberculosis/HIV co-infection, but, there are only a few indicators that significantly affect the risk of M. tuberculosis/HIV co-infection. It is estimated that a number of predictors of M. tuberculosis/HIV co-infection still remain unknown and require further investigations.

Which of the following measures of effect are statistically significant? Select all that apply.

Directions: Read through this progress note on Roy A. Takashima. Abstract information from the note about the subjective symptoms, objective findings, and diagnoses. List the diagnostic and procedure codes you think this case would warrant.

The Case:

Takashima, Roy A.

October 5, 20xx

Patient presents with many things going on. First, he's had no difficulties after the feral cat bite, and the cat was normal on quarantine. He seemed to be recovering from the flu but is plagued with a persistent cough and pain down the center of his chest attributed to bronchitis without fever or grossly discolored phlegm. Physical examination shows expiratory rhonchi and gross exacerbation of his cough on forced expiration. Spirometry before and after bronchodilator was remarkably good: he is symptomatically improved with a Proventil inhaler, which he is given as a sample. I don't think other antibiotics would help. His reflux is under good control with proprietary antacids with a clear examination. He has several areas of seborrheic keratoses on his face and head that need attention. Finally, in follow-up, he needs a complete physical examination. - Ting Cho, MD

Diagnosis, Influenza and acute bronchitis

Question:

Subject symptoms found in this case?

TASK: MAKE A BRIEFING OF TEN (10) SENTENCES

Abstract

Although a glimmer of hope might suggest that the economy is inching back upward after the economic downturn of the past six years, classic fraud schemes remain prevalent; because most professionals are focused on servicing their clients, they might not be scrutinizing a company's inflow and outflow of funds. Fraud has always colored the business landscape and probably always will; thus, business owners must understand the red flags of classic bud schemes and know when to turn to professionals who can perform fraud risk assessments and conduct investigations if financial fraud is suspected. Fraudsters' motivation might differ in varied economic climates; typically, such individuals are trying to obtain more money to pay for an enhanced lifestyle or to fund a habit that requires cash support. Stricter due diligence or control procedures can enhance fraud prevention.

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Although a glimmer of hope might suggest that the economy is inching back upward after the economic downturn of the past six years, classic fraud schemes remain prevalent; because most professionals are focused on servicing their clients, they might not be scrutinizing a company's inflow and outflow of funds. Fraud has always colored the business landscape and probably always will; thus, business owners must understand the red flags of classic fraud schemes and know when to turn to professionals who can perform fraud risk assessments and conduct investigations if financial fraud is suspected.

On the Lookout for Fraud

The same red flags indicating potential fraud exist in both vibrant and stagnant economies. Fraudsters' motivations might differ in varied economic climates; typically, such individuals are trying to obtain more money to pay for an enhanced lifestyle or to fund a habit that requires cash support. Regardless of the state of the economy, financial fraud has the same negative impact on business owners: less money in the bank translates into lower bonuses for employees, less capital available for business expansion, and lower profits for the owners.

Which types of fraud should business owners remain on the lookout for? The most common fraud scenario is misappropriation of assets, more commonly referred to as embezzlement, where employees who are experiencing personal financial pressure steal cash or other company assets. Such employees usually know the threshold amounts that require a higher level of approval for funds to be disbursed, and they know which amounts internal and external auditors review to form opinions. Thus, they might believe that they have the tools necessary to commit fraud. Asset misappropriation takes place whenever assets are readily available and controls are relatively loose.

Another increasingly common form of fraud involves stealing an employer's intellectual property or confidential financial information. There is currently a major push by federal law enforcement to crack down on such identity theft. Business owners or medical professionals who maintain clients' or patients' Social Security numbers should take extra precautions to protect this confidential information from internal employees who could sell it to criminal enterprises. The explanation of why employees take advantage of such situations is simple: They are under financial pressure. They have lost hours or benefits and their spouses have lost jobs. They have a strong incentive to try to make up their losses by taking readily available cash and other assets.

Fraud Prevention Steps

In light of these examples, what should business owners do? The first step is to recognize that fraud is common and that it can be orchestrated or perpetrated even by the most trusted employee. The second step is to understand the impact of fraud on the bottom line. Statistics have shown that a business loses approximately 5% of its gross revenue to fraud schemes per year (Report to the Nations on Occupational Fraud and Abuse: 2012 Global Fraud Study, Association of Certified Fraud Examiners [ACFE], http://www.acfe.com/rttn-highlights.aspx).

Assets disappear readily. In more than 20% of 2012 cases, the cost of each fraud exceeded $1 million; in another 68% of cases, it ranged from $1 to $400,000 (ACFE 2012). Many of these losses-particularly in the tier of $400,000 or less-were for very basic crimes. Billing fraud (i.e., creating false vendors, submitting personal invoices for payment) accounted for nearly one quarter of the cases. Check tampering (i.e., taking blank checks or diverting checks to a personal account) and skimming (i.e., accepting payments from a customer and not reporting them) followed close behind, as well as noncash theft (of inventory).

After recognizing the risks and the stakes involved, business owners should perform a fraud risk assessment. The key components of such an assessment are as follows:

* Assess. Review current internal controls and rank the potential vulnerabilities to fraud

* Design. Remove temptation by taking a risk-based approach to minimizing the opportunity for fraud to occur.

* Detect. Identify possible fraud when it happens.

* Evaluate. Revisit the changes made to reassess effectiveness.

* Respond. Take corrective action to strengthen internal controls in order to reduce the opportunity for fraud and investigate any fraudulent activity discovered.

A fraud risk assessment is critical. Although conducting investigations is a job for experienced outside professionals, fraud prevention begins with a business owner who recognizes the enormous impact of fraud on revenue. The business owner should evaluate risk areas across the entire organization and obtain input from process owners, in order to assess opportunities for fraud and weaknesses in internal controls.

Stricter due diligence or control procedures can enhance fraud prevention. Moreover, business owners should place some focus on "tone at the top." Creating a code of conduct that defines acceptable business practices, along with conducting annual (or more frequent) entity-wide training sessions, can go a long way toward establishing a low-tolerance atmosphere and keeping borderline fraudsters from acting on their impulses. These heightened due diligence procedures will likely deter an employee who is trying to decide if stealing company assets is worth it. Setting up a whistleblower telephone hotline is another method of giving employees or vendors the opportunity to call in anonymously and report suspicious activity.

Once a fraud is detected, the assistance of an experienced fraud investigator is essential. A fraud expert can conduct the investigation with oversight from general counsel or outside attorneys, if deemed necessary. Depending upon the type of entity and the industry, the results of the investigation might need to be reported to the appropriate regulator or authority.

The most important lesson is that fraud is still prevalent-it always has been and it always will be. Classic misappropriation of assets is a fraud scheme that remains a risk in both good and bad economic times. Business owners are encouraged to realize that financial fraud might be going on right now in their company, perhaps even by their most trusted employee. By implementing the suggested controls and by displaying a consistent tone at the top, business owners can protect themselves from fraudulent schemes being committed by their employees and outside predators.

Additional Considerations

One common form of fraud is an employee stealing from an employer, but a business owner facing higher taxes due to tax law changes and rate increases can also perpetrate fraud. Such business owners might begin contemplating how to not report all of their income or might create false expenses to reduce their federal and state income tax bills. This temptation involves greater risks and potential jail time. Often, in the authors' personal experience, these instances start small and escalate into major problems after several years in which such schemes go undetected. Business owners are lulled into a sense of comfort when they believe that they remain under the radar-until they receive an 1RS or state audit letter.

The chance of a taxpayer being audited is small; however, the risk of selection for audit for a sole proprietor or closely held (five or fewer shareholders) business is greater. Trusted employees might not be fraudsters, but in cases where business owners are committing fraud, such employees might turn into whistleblowers for a percentage of the taxes collected. Employees who suspect such activities should look into the Whistleblower Protection Enhancement Act of 2013.

Business owners and their advisors should remain aware of the risks of fraud and should remain vigilant by implementing the fraud prevention steps suggested in this discussion. Although fraud might never disappear, business owners and employees can take steps to lessen its frequency. ?

David Gannaway is a principal in Citrin Cooperman's valuation and forensic services group in New York, N.Y. A former special agent with the 1RS's Criminal Investigation Division, he now provides litigation consulting services. He can be reached at [email protected].

Consider the problem of carbon dioxide emissions. We will abstract away from the problem slightly, assuming there are pollutions and consumer in two regions, the OECD (O) and the rest of the world (R). Suppose the marginal cost of controlling CO₂ emissions is $10 per ton of emissions. Let the marginal willingness to pay for pollution reduction be 13-Q for region O and 12-2Q for region R, where Q is the amount of pollution reduction. The United Nations is considering two proposed methods for controlling CO₂ emissions, both involving polluters paying for the damage they cause. Proposal A involves the polluters paying damages to each region for the pollution generated. Proposal B involves the polluters in each region independently negotiation pollution reductions, assuming the other region is not undertaking pollution reductions.

A. Graph the marginal abatement cost and the total marginal willingness-to-pay schedules. What is the socially efficient level of emission reductions, Q?

B. How much total pollution reductions will occur under proposal A and what will be the total compensation received by regions O and R? If those payments were instead placed in the general coffers of the UN, would the outcome be any different from an efficiency point of view? Why or why not?

C. How much pollution would be generated under proposal B? Explain any differences between this answer and the answer to parts (a) and (b).

Abstract: Charles Watts, age 68, was diagnosed with benign prostatic hypertrophy (BPH). He is admitted to the medical–surgical unit and scheduled for a transurethral resection of the prostate (TURP).  

Objective: Explain the pathophysiology, manifestations, complications, interprofessional care and nursing care of disorders of the male reproductive system, including disorders of sexual function, the penis, the testes and scrotum, the prostate gland, and the breast.  Discuss the purposes, nursing implications, and health education for medications and treatments used to treat disorders of sexual function, the penis, the testes and scrotum, the prostate gland, and the breast.  

Charles Watts, age 68, sought treatment from his healthcare provider for urinary symptoms. He complained of urgency, frequency, difficulty starting his urinary stream, nocturia, and post-void dribbling. After the digital rectal examination and a prostatespecific antigen (PSA) level that was slightly elevated, the diagnosis of prostatic hypertrophy was made. Mr. Watts was referred to the urologist, who, upon further testing, ruled out prostatic cancer and made the diagnosis of benign prostatic hypertrophy. Mr. Watts is now admitted to the medical–surgical unit for a transurethral resection of the prostate (TURP). He is 5 feet, 10 inches tall, and weighs 188 pounds. His admission vital signs are T 97.7°F, P 88, R 24, and BP 132/78. He has a past history of hypertension and a myocardial infarction 4 years ago that was treated by a surgical stenting procedure. He currently takes aspirin 81 mg p.o. daily and enalapril (Vasotec) 10 mg p.o. daily.  

This activity contains 6 questions.  

1. Explain the pathophysiology of BPH and the reasons Mr. Watts experienced the urinary symptoms.  

2. The nurse assesses Mr. Watts regarding his knowledge of the scheduled surgical procedure, and he tells the nurse that other than his operation for placement of the stent in his heart, he has never had any other surgery. The nurse establishes that he has a nursing diagnosis of Knowledge Deficit related to pre- and postoperative measures important for prostate surgery as evidenced by patient statement. What preoperative teaching should the nurse include for Mr. Watts?  

3. What are the important nursing interventions related to the management of continuous bladder irrigation (CBI) by use of the three-way catheter?  

4. Why does the nurse assign the priority diagnosis Risk for Imbalanced Fluid Volume related to blood loss from the operative site and the possibility of absorbing excess fluid from the bladder irrigation solution?  

5. Mr. Watts questions the nurse regarding any special things he should do when he leaves the hospital. The nursing diagnosis of Readiness for Enhanced Therapeutic Regimen Management secondary to home care after prostate surgery as evidenced by patient questions is made. What discharge instructions does the nurse provide for Mr. Watts?  

6. Describe the pharmacological options available for the patient diagnosed with BPH.

CS

Using the following UML outline, create the following abstract parent class along with the
4 subclasses and Driver class. Implement the Classes, listed attributes and methods along with any additional things that you may need.

Add a driver class that utilizes the methods/attributes in the classes to output the following based on the vehicle type (therefore, you must create an instance for all 4 subclasses in your driver):

1. Vehicle Type (i.e., Car, Airplane, etc.)
2. Transportation method (wheels, wings, etc.)
3. Whether your vehicle transports passengers or not.
4. Whether your vehicle is a passenger vehicle or Cargo Vehicle
5. Whether your vehicle travels on land, water or air.

Implement the following UML:

UML

Vehicle Class (Abstract)

Attributes:

-vehicleType:String
-passengers:boolean

Behaviors:

+Vehicle(vehicleType:String, passengers:boolean):void
+Abstract travelMethod(vehicleType:String):String
+getPassengers():boolean //returns passengers value
+getVehicleType():String

Child Class1:

Car

Attributes:

-travelMethod:String

Behaviors:

+travelMethod(vehicleType:String):String //Returns travelMethod based on vehicleType
for instance if helicopter, the travelMethod = Blades/Propellers, if car then
travelMethod = wheels, if airplane then wings, etc.

+isVehicle():void. //Outputs vehicle type, transportation method, whether it is a passenger vehicle or cargo vehicle and whether it rolls with wheels, flies with wings or flies with blades, or travels on water.

Child Class2:

Airplane

Attributes:

-travelMethod:String

Behaviors:

+travelMethod(vehicleType:String):String //Returns travelMethod based on vehicleType
for instance if helicopter, the travelMethod = Blades/Propellers, if car then
travelMethod = wheels, if airplane then wings, etc.

+isVehicle():void. //Outputs vehicle type, transportation method, whether it is a passenger vehicle or cargo vehicle and whether it rolls with wheels, flies with wings or flies with blades, or travels on water.

Child Class3:

Helicoptor

Attributes:

-travelMethod:String

Behaviors:

+travelMethod(vehicleType:String):String //Returns travelMethod based on vehicleType
for instance if helicopter, the travelMethod = Blades/Propellers, if car then
travelMethod = wheels, if airplane then wings, etc.

+isVehicle():void. //Outputs vehicle type, transportation method, whether it is a passenger vehicle or cargo vehicle and whether it rolls with wheels, flies with wings or flies with blades, or travels on water.

Child Class4:

Boat

Attributes:

-travelMethod:String

Behaviors:

+travelMethod(vehicleType:String):String //Returns travelMethod based on vehicleType
for instance if helicopter, the travelMethod = Blades/Propellers, if car then
travelMethod = wheels, if airplane then wings, etc.

+isVehicle():void. //Outputs vehicle type, transportation method, whether it is a passenger vehicle or cargo vehicle and whether it rolls with wheels, flies with wings or flies with blades, or travels on water.

Deliverables:

1. Parent Class for Vehicle, 4 child classes and 1 Driver class.

2. Screenshots of output

3. Place your name, class, date and assignment in comments at top of each .java file. (Points off for files with no name)