Tempo Company's fixed budget (based on sales of 14,000 units) for the first quarter of calendar year 2017 reveals the following.

Complete the following flexible budgets for sales volumes of 12,000, 14,000, and 16,000 units. (Round cost per unit to 2 decimal places.)

Tempo Company's fixed budget (based on sales of 14,000 units) for the first quarter of calendar year 2017 reveals the following.

Tempo Company's fixed budget (based on sales of 14,000 units) for the first quarter reveals the following.

(1) Compute the total variable cost per unit.
(2) Compute the total fixed costs.
(3) Compute the income from operations for sales volume of 12,000 units.
(4) Compute the income from operations for sales volume of 16,000 units.

that is the exact question

Tempo Company's fixed budget (based on sales of 10,000 units) for the first quarter reveals the following. Fixed Budget Sales (10,000 units × $203 per unit) $ 2,030,000 Cost of goods sold Direct materials $ 230,000 Direct labor 430,000 Production supplies 260,000 Plant manager salary 30,000 950,000 Gross profit 1,080,000 Selling expenses Sales commissions 80,000 Packaging 150,000 Advertising 100,000 330,000 Administrative expenses Administrative salaries 80,000 Depreciation—office equip. 50,000 Insurance 20,000 Office rent 30,000 180,000 Income from operations $ 570,000 (1) Compute the total variable cost per unit. (2) Compute the total fixed costs. (3) Compute the income from operations for sales volume of 8,000 units. (4) Compute the income from operations for sales volume of 12,000 units.

Compute the total variable cost per unit.

• Compute the total fixed costs.

  	Total fixed costs

Compute the income from operations for sales volume of 8,000 units.

Compute the income from operations for sales volume of 12,000 units.

Green Landscaping Inc. is preparing its budget for the first quarter of 2017. The next step in the budgeting process is to prepare a schedule of cash collections and a schedule of cash payments. The following information has been collected: All sales are on account and 60% is collected in the month of sale, 30% 1 month after the sale, and 10% two months after the sale. Actual sales revenues for November 2016 were $80,000 and December 2016 $90,000. Projected sales revenue for January 2017 $100,000, February 2017 $120,000, and March 2017 $140,000. Purchases of direct materials are made on account and 60% is paid in the month of purchase and 40% in the month following the purchase. Actual purchases of direct materials for December 2016 are $14,000. Projected purchases of direct materials for January 2017 $12,000, February 2017 $15,000, and March 2017 $18,000.

Instructions:
(a) Prepare a schedule of cash collections from sales by month for January, February, and March 2017.
(b) Determine the accounts receivable balance as of March 31, 2017.
(c) Prepare a schedule of cash payments for direct materials by month for January, February, and March 2017.
(d) Determine the accounts payable balance as of March 31, 2017.

empo Company's fixed budget (based on sales of 14,000 units) for the first quarter reveals the following.

(1) Compute the total variable cost per unit.
(2) Compute the total fixed costs.
(3) Compute the income from operations for sales volume of 12,000 units.
(4) Compute the income from operations for sales volume of 16,000 units.

can you please solve #4

1. Prepare a sales budget for the first quarter (Q1) and the first quarter in total. The selling price per unit is $50.00.

December of the previous year    10,000

January                                     70,000

February                                     30,000

March                                        50,000

April                                          80,000

Past experience shows that 45% of sales are collected in the month of the sale, and 55% in the month following the sale.

2. Prepare a purchases budget for January through March, and the first quarter in total. Assume that the company only sells one product that can be purchased at $35.00 per unit. The market for this product is very competitive and customers highly value service such as quality and on time delivery of the product. Also assume that currently it is company policy that ending inventory should equal 45% of next month’s projected sales. All costs are paid in the current month except inventory purchases, which are paid in the month following the purchase (i.e. January purchases are paid in February).

3. Prepare a cash budget for January through March and for the first quarter in total. The company maintains a minimum cash balance of $70,000, and this was the balance in the cash account on January 1^st. Other expenses include $35,000 per month for rent, $24,000 per month for advertising, and $66,000 per month for depreciation. In addition, variable Selling & Administrative cost is $12 per unit sold, and the company paid a $20,000 dividend in February.

The company has an open line of credit with a bank and can borrow at an annual rate of 12%.
For simplification assume that all loans are made at the beginning of the month when borrowing is needed, and repayments are made at the end of a month if there is enough cash to make the payment. Also, interest associated with a loan is only paid at the time when that loan or a portion thereof is paid. Additionally, all loans and repayments (not the interest portion) can only be made in increments of $1000 and the company would like to pay its debts, or a portion thereof, as soon as it has enough cash to do so.

4. Prepare the Budgeted Income Statement based on the information given above.

Label the budgets prepared in Steps 1-4 as budget scenario A.

5. Repeat steps 2-4 for budget scenarios B and C using the following Desired Ending Inventory assumptions:

6. Write a brief analysis of the three inventory policies depicted in the budget scenarios A, B and C and recommend a policy that the company should implement. Give reasons for your recommendation. Your write-up should be based on the results you obtained from the analyses in steps 1-5 above. Assume that you are writing on behalf of a professional consultant advising the President of the company about the company’s inventory policies. Your write-up should be in the form of a one-page Memo to the President of the company. Organization, grammar, and spelling are important.

Preparation of Individual Budgets
During the first calendar quarter of 2016, Clinton Corporation is planning to manufacture a new product and introduce it in two regions. Market research indicates that sales will be 5,000 units in the urban region at a unit price of $53 and 4,000 units in the rural region at $48 each. Because the sales manager expects the product to catch on, he has asked for production sufficient to generate a 3,000-unit ending inventory. The production manager has furnished the following estimates related to manufacturing costs and operating expenses:

*Varies per unit sold, not per unit produced.

a. Assuming that the desired ending inventories of materials A and B are 3,000 and 5,000 pounds, respectively, and that work-in-process inventories are immaterial, prepare budgets for the calendar quarter in which the new product will be introduced for each of the following operating factors:

Do not use negative signs with any of your answers below.

1. Total sales

$_____

2. Production

_____ units

3. Material purchase cost

4. Direct labor costs

$ _____

5. Manufacturing overhead costs

6. Selling and administrative expenses

b. Using data generated in requirement (a), prepare a budgeted income statement for the calendar quarter. Assume an overall effective income tax rate of 30%.

Round answers to the nearest whole number.
Do not use negative signs with your answers.

Preparation of Individual Budgets
During the first calendar quarter of 2016, Clinton Corporation is planning to manufacture a new product and introduce it in two regions. Market research indicates that sales will be 5,000 units in the urban region at a unit price of $53 and 4,000 units in the rural region at $48 each. Because the sales manager expects the product to catch on, he has asked for production sufficient to generate a 3,000-unit ending inventory. The production manager has furnished the following estimates related to manufacturing costs and operating expenses:

*Varies per unit sold, not per unit produced.

a. Assuming that the desired ending inventories of materials A and B are 3,000 and 5,000 pounds, respectively, and that work-in-process inventories are immaterial, prepare budgets for the calendar quarter in which the new product will be introduced for each of the following operating factors:

Do not use negative signs with any of your answers below.

1. Total sales

$Answer

2. Production

Answer

units

3. Material purchase cost

4. Direct labor costs

$Answer

5. Manufacturing overhead costs

6. Selling and administrative expenses

b. Using data generated in requirement (a), prepare a budgeted income statement for the calendar quarter. Assume an overall effective income tax rate of 30%.

Round answers to the nearest whole number.
Do not use negative signs with your answers.

CASE 17 CAMPBELL: HOW TO KEEP THE SOUP SIMMERING*

At the first-quarter earnings call for the 2015 fiscal year, Denise Morrison, Campbell’s president and chief execu- tive officer, said: We were encouraged by our organic sales growth across most of our portfolio, particularly in U.S. Simple Meals and Global Baking and Snacking. Our U.S. soup performance was driven by a stronger seasonal sell-in and the timing of our quarter end relative to the Thanksgiving holiday. Although our year is off to a solid start, we are facing some challenges. Our gross margin performance did not meet our expectations due largely to higher than anticipated commodity costs and supply chain costs. We have plans to offset gross margin pressure in the remainder of the year. We also are facing headwinds from currency. Despite these challenges, we continue to make progress strengthening our core business and expanding into faster-growing spaces.1 Denise Morrison, who formerly headed the company’s North American soup division, had taken over as CEO nearly four years ago. The change at the top for the company received a lukewarm response from investors, who were watching to see what drastic changes Morrison might have in store. Analysts suggested that Campbell may have missed an opportunity by picking insider Denise Morrison to lead t he world’s largest soup2 maker instead of br inging in outside talent to revive sales. By 2015, with Morrison at the helm, the Campbell Soup Company had launched more than 50 new products, includ- ing 32 new soups. This number was way up from prior years. Morrison also shocked experts with the $1.55 billion buy- out of California juice-and-carrot seller Bolthouse Farms, the largest acquisition in Campbell’s history.3 Despite the revitalization of its product line, however, the company still failed to accomplish an impressive comeback. Company Background Probably known best for its red-and-white soup cans, the Campbell Soup Company was founded in 1869 by Abram Anderson and Joseph Campbell as a canning and pre- serving business. Over 140 years later, Campbell offered a whole lot more than just soup in a can. In 2014 the company, headquartered in Camden, New Jersey, com- petitively operated in five segments: U.S. Simple Meals, Global Baking and Snacking, International Simple Meals and Beverages, U.S. Beverages, and Bolthouse and Food- service. In 2015 Campbell’s products were sold in over 100 countries around the world, and the company had opera- tions in the United States, Canada, Mexico, Australia, Belgium, China, France, Germany, Indonesia, Malaysia, and Sweden

The company was pursuing strategies designed to expand the availability of its products in existing markets and to capitalize on opportunities in emerging channels markets around the globe. As a first step, Campbell Soup Company, synonymous with the all-American kitchen for 125 years, acquired in 1994 Pace Foods Ltd., the world’s largest producer of Mexican sauces. Frank Weise, CFO at that time, said that a major motivation for the purchase was to diversify Campbell and to extend the Pace brand to other products. In addition, he said, the company saw a strong potential for Pace products internationally. Camp- bell also saw an overlap with its raw material purchas- ing operations, since peppers, onions, and tomatoes were already used in the company’s soups, V8, barbecue sauce, and pasta sauces.5 To help reduce some of the price volatil- ity for ingredients, the company used various commodity risk management tools for a number of its ingredients and commodities, such as natural gas, heating oil, wheat, soy- bean oil, cocoa, aluminum, and corn.6

Campbell Soup, a leading food producer in the United States, had a presence in approximately 9 out of 10 U.S. households. However, in recent years, the company faced a slowdown in its soup sales, as consumers were seeking more convenient meal options, such as ready meals and dining out. To compete more effectively, especially against General Mills’ Progresso brand, Campbell had undertaken various efforts to improve the quality and convenience of its products.

China and Russia

For the longest time, consumption of soup in Russia and China had far exceeded that in the United States, but in both countries nearly all of the soup was homemade. Within the past few years, however, with the launch of products tailored to local tastes, trends, and eating hab- its, Campbell presumed that it had the chance to lead the soup commercialization in Russia and China. “We have an unrivaled understanding of consumers’ soup consumption behavior and innovative technology capabilities within the Simple Meals category. The products we developed are designed to serve as a base for the soups and other meals Russian and Chinese consumers prepare at home.”7 For about three years, in both Russia and China, Campbell sent its marketing teams to study the local markets. The main focus was on how Russians and Chinese ate soup and how and Campbell could offer something new. As a result, Camp- bell came up with a production line specifically created for the local Russian market. Called “Domashnaya Klassika,” the line was a stock base for soups that contains pieces of mushrooms, beef, or chicken. Based on this broth, the main traditional Russian soup recipes could be prepared.

But after just four short years, Campbell pulled out of the Russian market that it had thought would be a simmer- ing new location for its products. Campbell’s chief oper- ating officer and newly elected CEO Denise Morrison said results in Russia fell below what the company had expected. “We believe that opportunities currently under exploration in other emerging markets, notably China, offer stronger prospects for driving profitable growth within an acceptable time frame,” Morrison said. When the company entered Russia, Campbell knew that it would be challenging to persuade a country of homemade-soup eat- ers to adopt ready-made soups. When Campbell initially researched the overseas markets, it learned that Russians eat soup more than five times a week, on average, com- pared with once a week among Americans.8 This indicated that both the quality and sentiment of the soup meant a great deal to Russian consumers—something that Camp- bell may have underestimated. As for China, a few years after Campbell infiltrated the market, CEO Denise Morrison was quoted by Global Entrepreneur as saying, “The Chinese market consumes roughly 300 billion servings of soup a year, compared with only 14 billion servings in the U.S.”9 When enter- ing the Chinese market, Campbell had determined that if the company could capture at least 3 percent of the at-home consumption, the size of the business would equal that of its U.S. market share. “The numbers blow your hair back,” said Larry S. McWilliams, president of Campbell’s international group.10 While the company did successfully enter the market, it remained to be seen whether Campbell had the right offerings in place to capture such a market share or whether China’s home- made-soup culture would be as disinclined to change as Russia’s was.

U.S. Soup Revitalization

In September 2010, Campbell launched its first-ever umbrella advertising campaign to support all of its U.S. soup brands with the slogan “It’s Amazing What Soup Can Do,” highlighting the convenience and health ben- efits of canned soup. The new campaign supported Campbell’s condensed soups, Campbell’s Chunky soups, Campbell’s Healthy Request soups, and Campbell’s Select Harvest soups, as well as soups sold in microwave- able bowls and cups under these brands.11 Despite other departments flourishing, the soup division continued to struggle.

Campbell Soup Company had begun moving atten- tion away from reducing salt in its products and focusing more on “taste adventure” as its U.S. soup business was turning cold. Campbell Soup was one of the first large U.S. packaged-food makers to focus heavily on decreas- ing sodium across its product line. The salt-reduction push was one of the company’s biggest initiatives of the past decade. “The company had pursued reducing sodium lev- els and other nutritional health initiatives partly to prepare for expected nutritional labeling changes in the U.S. But amid the attention on salt-cutting, management focused less on other consumer needs, such as better tastes and exciting varieties,” said former CEO Douglas Conant. “I think we’ve addressed the sodium issue in a very satisfac- tory way. The challenge for us now is to create some taste adventure.”12 Yet with Campbell reinventing its product offerings and revitalizing its soup line, Conant decided that his work was done and it was time to retire. He stepped down as CEO in July 2011 at the age of 60. Denise Morrison, for- merly president of the North America Soup division, took the reins as chief executive. At the time of her promotion, many were hesitant to accept her as the best candidate for the position. After all, the soup division, which had been her responsibility, had been losing steam and encounter- ing declining sales under her tenure. Yet the company rein- forced its confidence in her to do the job, and Morrison assured everyone that changes were on their way and a shift in focus was in the works. Morrison said that Camp- bell would bring both the “taste and adventure” back to its soups, with a new and expanded product line offering unique new flavors and “adding the taste back” by doing away with sodium reduction.

Firm Structure and Management

Campbell Soup was controlled by the descendants of John T. Dorrance, the chemist who had invented con- densed soup more than a century ago. In struggling times, the Dorrance family faced agonizing decisions: Should they sell the Campbell Soup Company, which had been in the family’s hands for three generations? Should they hire new management to revive flagging sales of its chicken noodle and tomato soups and Pepperidge Farm cookies? Or should Campbell perhaps become an acquirer itself? The company went public in 1954, when William Murphy was the president and CEO. Dor- rance family members continued to hold a large portion of the shares. After CEO David Johnson left Campbell in 1998, the company started to weaken and lose cus- tomers,13 until Douglas Conant became CEO and trans- formed Campbell into one of the food industry’s best performers. Conant became CEO and director of Campbell Soup Company in January 2001. He joined the Campbell’s team with an extensive background in the processed- and packaged-food industry. He had spent 10 years with Gen- eral Mills, filled top management positions in marketing and strategy at Kraft Foods, and served as president of Nabisco Foods. Conant worked toward the goal of imple- menting the Campbell’s mission of “building the world’s most extraordinary food company by nourishing people’s lives everywhere, every day.”14 He was confident that the company had the people, the products, the capabilities, and the plans in place to actualize that mission.

Under Conant’s direction, Campbell made many reforms through investments in improving product qual- ity, packaging, and marketing. He worked to create a com- pany characterized by innovation. During his tenure, the company improved its financial profile, upgraded its sup- ply chain system, developed a more positive relationship with its customers, and enhanced employee engagement. Conant focused on winning in both the marketplace and the workplace. His efforts produced an increase in net sales from $7.1 billion in fiscal 2005 to $7.67 billion in fiscal 2010.15

For Conant, the main targets for investment, fol- lowing the divestiture of many brands, included simple meals, baked snacks, and vegetable-based beverages. In 2010, the baking and snacking segments sales increased 7 percent, primarily due to currency. Pepperidge Farm sales were comparable to those a year earlier, as the additional sales from the acquisition of Ecce Panis, Inc., and volume gains were offset by increased promotional spending. Some of the reasons for this growth were the brand’s positioning, advertising investments, and improvements and additions in the distribution system. Conant also secured an agreement with Coca-Cola North America and Coca-Cola Enterprises Inc. for distribution of Campbell’s refrigerated single-serve beverages in the United States and Canada through the Coca-Cola bottler network.16

In fiscal 2010, the company continued its focus on delivering superior long-term total shareowner returns by executing the following seven key strategies:17

?   Grow its icon brands within simple meals, baked snacks, and healthy beverages.

?   Deliver higher levels of consumer satisfaction through superior innovation focused on wellness while providing good value, quality, and convenience.

?   Make its products more broadly available and relevant in existing and new markets, consumer segments, and eating occasions.

?   Strengthen its business through outside partnerships and acquisitions.

?   Increase margins by improving price realization and companywide total cost management.

?   Improve overall organizational excellence, diversity, and engagement.

?   Advance a powerful commitment to sustainability and corporate social responsibility.

Another major focus for Conant and Campbell Soup was care for their customers’ wellness needs, overall prod- uct quality, and product convenience. Some of the main considerations regarding wellness in the U.S. market were obesity and high blood pressure. For example, building on the success of the V8 V-Fusion juice offerings, the com- pany planned to introduce a number of new V8 V-Fusion Plus Tea products. In the baked snacks category, the com- pany planned to continue upgrading the health credentials of its cracker (or savory biscuit) offerings. Responding to consumers’ value-oriented focus, Campbell’s condensed soups were relaunched with a new contemporary packag- ing design and an upgrade to the company’s gravity-fed shelving system.18

In 2011, after 10 years leading the company, Conant retired. His successor, Denise Morrison, had worked for Conant for quite some time, not just at Campbell but at Nabisco as well as earlier in their careers. In August 2011, on her first day as CEO, she was set on employing a new vision for the company: “Stabilize the soup and simple meals businesses, expand internationally, grow faster in healthy beverages and baked snacks—and add back the salt.”19 With the younger generation now making up an increasingly large percentage of the population, Morrison knew that the company had to change in order to increase the appeal of its products. At that time, the U.S. population included 80 million people between the ages of 18 and 34, approximately 25 percent of the population. Early on in her role as chief executive, Morrison dispatched Campbell’s employees to hipster hubs—including Austin, Texas; Port- land, Oregon; London; and Paris—to find out what these potential customers wanted. 20st To build employee engagement, Campbell provided manager training across the organization. This training was just one part of the curriculum at Campbell University, the company’s internal employee learning and development program. Exemplary managers built strong engagement among their teams through consistent action planning. The company emphasized employees’ innovation capabilities, leadership behavior, workplace flexibility, and wellness.

Challenges Ahead

In her new role, Morrison said she planned to “accelerate the rate of innovation” at the company. Morrison planned to grow the company’s brands through a combination of more healthy food and beverage offerings, global expan- sion, and the use of technology to woo younger consumers. While innovation isn’t a term typically associated with the food-processing industry, Morrison said that innovation was a key to the company’s future success. As an example, she cited Campbell’s development of an iPhone applica- tion that provided consumers with Campbell’s Kitchen recipes. The company’s marketing team devised the plan as a way to appeal to technologically savvy, millennial- generation consumers, Morrison said.21 Yet more than a few years into her governance, analysts still had a lukewarm response about Morrison taking over. They still expressed their doubt about whether Morrison was the right choice, rather than some new blood as a CEO replacement.

Industry Overview

The U.S. packaged-food industry had recorded faster current-value growth in recent years mainly due to a rise in commodity prices. In retail volume, however, many cat- egories saw slower growth rates because Americans began to eat out more often again. This dynamic changed for a couple of years when cooking at home became a more popular alternative in response to the recession and the sharp rise in commodity prices in 2008.22

After years of expansions and acquisitions, U.S. packaged- food companies were beginning to downsize. In August 2011, Kraft Foods announced that it would split into two companies: a globally focused biscuits and confectionery enterprise and a domestically focused cheese, chilled processed-meats, and ready-meals firm. After purchasing Post cereals from Kraft in 2008, Ralcorp Holdings spun off its Post cereals business (Post Holdings Inc.) in February 2012.23

Though supermarkets were the main retail channel for buying packaged food, other competitors were gain- ing traction by offering lower prices or more convenience. The recession forced shoppers to consider alternative retail channels as they looked for ways to save money. A big beneficiary of this consumer trend was the discount- ers, which carried fewer items and national brands than super marketsbutofferedlowerpricesinreturn.Forexam- ple, dollar store chains Dollar General and Family Dollar expanded their food selections to increase their appeal. Drugstore chains CVS and Walgreens expanded their food selections as well, especially in urban areas, to leverage their locations as a factor of convenience. Mass merchan- diser Target continued to expand its PFresh initiative, fea- turing fresh produce, frozen food, dairy products, and dry groceries.24

The increasing availability of refrigeration and other kinds of storage space in homes influenced the demand for packaged goods in emerging markets. However, for con- sumers who lacked the ability to preserve and keep larger quantities, U.S. companies began selling smaller packages, with portions that could be consumed more quickly

Competition

Campbell operated in the highly competitive food industry and experienced worldwide competition for all of its prin- cipal products. The principal areas of competition were brand recognition, quality, price, advertising, promotion, convenience, and service.

Nestle?

Nestle? was the world’s number-one food company in terms of sales, the world leader in coffee (Nescafe?), one of the world’s largest bottled-water (Perrier) makers, and a top player in the pet food business (Ralston Purina). Its best-known global brands included Buitoni, Friskies, Maggi, Nescafe? Nestea, and Nestle?. The company owned Gerber Products, Jenny Craig, about 75 percent of Alcon Inc. (ophthalmic drugs, contact-lens solutions, and equipment for ocular sur- gery), and almost 28 percent of L’Ore?al.26 In July 2007 it purchased Novartis Medical Nutrition, and in August 2007 it purchased the Gerber business from Sandoz Ltd., with the goal of becoming a nutritional powerhouse. Furthermore, by adding Gerber baby foods to its baby formula business, Nestle? became a major player in the U.S. baby food sector.

General Mills

General Mills was the U.S. number-two cereal maker, behind Kellogg, fighting for the top spot on a consistent basis. Its brands included Cheerios, Chex, Total, Kix, and Wheaties. General Mills was also a brand leader in flour (Gold Medal), baking mixes (Betty Crocker, Bisquick), dinner mixes (Hamburger Helper), fruit snacks (Fruit Roll- Ups), grain snacks (Chex Mix, Pop Secret), and yogurt (Colombo, Go-Gurt, and Yoplait). In 2001 it acquired Pillsbury from Diageo and doubled the company’s size, making General Mills one of the world’s largest food com- panies. Although most of its sales came from the United States, General Mills was trying to grow the reach and position of its brands around the world.

Kraft Foods

The newly independent Kraft Foods Group was spun off by Mondele?z International (formerly Kraft Foods Inc.), divid- ing the North American grocery from the global snacks business in 2012. Kraft Foods Group was the fourth-largest consumer packaged-food and beverage company in North America. Its most popular brands included Kraft cheeses, beverages (Maxwell House coffee, Kool-Aid drinks), convenient meals (Oscar Mayer meats and Kraft mac’n cheese), grocery fare (Cool Whip, Shake N’ Bake), and nuts (Planters). While Mondele?z was focused on growth overseas, Kraft Foods Group was looking to resuscitate its business in North America.2

Heinz Company

H. J. Heinz had thousands of products. Heinz products enjoyed first or second place by market share in more than 50 countries. One of the world’s largest food pro- ducers, Heinz produced ketchup, condiments, sauces, frozen foods, beans, pasta meals, infant food, and other processed-food products. Its flagship product was ketchup, and the company dominated the U.S. ketchup market. Its leading brands included Heinz ketchup, Lea & Perrins sauces, Ore-Ida frozen potatoes, Boston Mar- ket, T.G.I. Friday’s, and Weight Watchers foods. In 2013 Heinz agreed to be acquired by Berkshire Hathaway and 3G Capital.29

Financials

In the 2014 fiscal year, Campbell’s sales from continu- ing operations increased 3 percent to $8.3 billion, driven by acquisitions and an additional workweek in the year. Organic sales declined 1 percent, while adjusted earn- ings per share (EPS) from continuing operations increased 2 percent to $2.53.

In the U.S. Simple Meals segment, sales were up 3 percent versus sales a year earlier. This compared to a 5 percent increase in fiscal 2013. The growth came from higher sales of Prego pasta sauces and Campbell’s dinner sauces. How- ever, sales declined in U.S. Soups as growth in Swanson broth was more than offset by declines in ready-to-serve and condensed soups.

The Global Baking and Snacking segment grew 7 percent (versus 4 percent in fiscal 2013) driven by mar- ginal growth at Pepperidge Farm and continued gains in Goldfish crackers, fresh bakery items, and the Indonesian market.

The U.S. Beverages business saw a continued decline in sales, and the company initiated turnaround plans to jump- start the business.

delivering economic, environmental, and social perfor- mance. Launched in 1999, the DJSI tracked the financial performance of leading sustainability-driven companies worldwide. In selecting the top performers in each busi- ness sector, DJSI reviewed companies on several general and industry-specific topics related to economic, envi- ronmental, and social dimensions. These included corpo- rate governance, environmental policy, climate strategy, human capital development, and labor practices. Campbell included sustainability and corporate social responsibility as one of its seven core business strategies.30 Campbell’s Napoleon, Ohio, plant implemented a new renewable energy initiative, anchored by 24,000 new solar panels. The 60-acre, 9.8-megawatt solar power system was expected to supply 15 percent of the plant’s electricity while reducing CO2 emissions by 250,000 metric tons over 20 years.31

Additionally, Campbell employees volunteered an aver- age of 20,000 hours annually at more than 200 nonprofit organizations. Supported by local farmers and Campbell, the Food Bank of South Jersey was earning revenue for hunger relief from sales of Just Peachy salsa. The salsa was created from excess peaches from New Jersey and was manufactured and labeled by employee volunteers at Campbell’s plant in Camden.32

What’s Next?

A new food-rating system unveiled in 2009, the Affordable Nutrition Index (ANI), analyzed both nutrition and the cost value of food, making it easier for consumers to find budget-friendly, nutritious foods. Dark-colored vegetables, certain fruits, and vegetable soups were among the most affordable, nutritious foods. “In today’s economy, more people are making food choices based solely on cost, so it’s important to guide them on ways to get nutritious options without hurting their wallets,” said Adam Drewnowski, PhD, a professor at the University of Washington. “It is important to identify a wide range of affordable, nutritious choices that can help people build a balanced diet that fits their lifestyle and budget.”33

As for Campbell, its advertising campaign failed to assist the company in gaining the expected traction in the ready-to-serve soup business. Campbell planned to correct this by introducing new products into what many considered a rather ordinary product line. But if the economy continued to improve, would Campbell’s name still resonate with American consumers or would con- sumers venture back to restaurants? Would Campbell’s soup simmer to perfection, or would the company be in hot water?

QUESTION:

1)VALUE CHAIN ANALYSIS

IE:INBOUND LOGISTICS,OPERATIONS,OUTBOUND LOGISTICS,MARKETING/SALES,SERVICE,PROCUREMENT,TECHNOLOGICAL DEVELOPMENT,HR,GENERAL ADMIN) THEN CONCLUSION OF VALUE CHAIN.

3)HOW DOES EXTERNAL ENVIORNMENT AFFECTS CAMPBELL STRATEGY

4)CAN INTERNAL ENVIORNMENT SUSTAIN COMPETITVE ADVANTAGE?(USE VALUE CHAIN+RESOURCE BASED VIEW

5)ISSUES CAMPBELLS FACED (INTERNAL/EXTERNAL)

6)SOURCES OF CAMPBELLS COMP ADVANTAGE?(BUSINESS LEVEL STRATEGY)(DIFFERENTIATED OR DIVERSIFIED)

7)RESOURCE BASED VIEW

8)LEADERSHIP OPINION FOR CURRENT CEO?