West Java topography condition is very potential for the development of hydro power plant technology especially mini-hydro power (PLTM) and micro-hydro power (PLTMH) which is a runoff river power plant. Unfortunately, until right now the business performance of PLTM and PLTMH is not optimal yet. It was allegedly related to the supply chain management and business partnership aspect.

The mountainous topograph in Southern part of West Java, with many small rivers flowing throughout the year and high rain fall volume have springs flowing to the rivers is very potential for the development of environment friendly hydroelectric technology, which is a runoff river power plant between 1-10 MWh called Mini Hydro Power Plant (Pembangkit Listrik Tenaga Mini Hidro). The equipment used is relatively simple and easy to find. The required land is not extensive, so there is no need to open the forest to build the large scale hydroelectric power supply with big water dam and huge power installation. Southern part of West Java has mountain topography spread all over the region. In general, mountain’s texture is steep with relatively few inhabitants. The mountainous area has a large electrical energy in the form of water. The flow of water from the plateau to the lower one has potential energy that can be utilized as a source of electrical energy, especially in Sukabumi, Cianjur, Garut and Tasikmalaya that still have forests and stable water supply. With the publication of ESDM Regulation no. 19 of 2015 on Micro Hydro Power Plants regarding the electricity tariff (Feed In Tariff) of Hydro Power Plants under 10 MW/h of 12 cent USD / KWh and the use of mini hidro Potential of 500 MW, newly installed 86.1 MW, should increase the number of Mini Hydro Power Plants (PLTM) in West Java.

Actually, the potential of Mini Hydro Power Plants for supporting to the main grid of electricity (Jawa Bali Network) and remote areas that have not reached the electricity network or areas that do not have other sources of fuel, so that the potential for the development of the Mini Hydro Power Plants is not optimal. However, the request for a Water Power Business Permit under 10 MW in Indonesia has only reached 33 Commercial Operation Date (COD) Permits from 266 Permits during 2015 to date. Until now, the company's performance is only 65%-75% of 86.1 MW installed yet, due to the frequent down time. This problem is caused by lack of optimal partnership and also supply chain management in mini hydro power plants companies, especially in the technology to be used, expertise people and financial investor. The Previous study has not address on Supply Chain Management and Strategic Partnership during the operation phase of Mini Hydro Power Plant. The form of partners relationship proposed by Cravens (2013) that includes a vertical relationship consisting of relationships with suppliers and customers and the relationship horizontally consisting of lateral and internal partnerships. In the era of decentralization of the energy sector in Indonesia, the key to sustainability success is extensive coordination with private parties, local government offices, state electricity company, and communities. On the other hand, Clement, Clement, Joseph (2013) suggests that the performance of a company with partnership is better than a single-ownership company. In addition, Agus and Hassan (2012) demonstrate that the product quality performance and business performance dependence on practices of strategic suppliers partnerships. Another factor that is alleged to have an impact on the optimum business performance of micro hydro power plant companies is regard to the aspects of the supply chain. Turban, Rainer & Porter (2004) mentions supply chain includes 3 components ie upstream supply chain, internal supply chain management, and downstream supply chain. Lia, Ragu-Nathan, Ragu-Nathan, Rao (2006) found that higher levels of SCM practice lead to increased competitive advantage and improved organizational performance.

Based on this background, the aim of this study is to examine;

1. Identify the components of the supply chain management and specify how this process can be implemented to improve the performance of the micro hydro power plant in West Java. (10marks)
2. In this case, this study are expected to be used by the Government in their policies and private sectors to boosting the e-business infrastructure and may also provide benefits to the next Mini Hydro Power Plant Business to extend this process by the use of business partnership and build their business performance. (10marks)

Mid-South Auto Leasing leases vehicles to consumers. The attraction to customers is that the company can offer competitive prices due to volume buying and requires an interest rate implicit in the lease that is one percent below alternate methods of financing. On September 30, 2018, the company leased a delivery truck to a local florist, Anything Grows. The lease agreement specified quarterly payments of $3,000 beginning September 30, 2018, the beginning of the lease, and each quarter (December 31, March 31, and June 30) through June 30, 2021 (three-year lease term). The florist had the option to purchase the truck on September 29, 2020, for $6,000 when it was expected to have a residual value of $10,000. The estimated useful life of the truck is four years. Mid-South Auto Leasing’s quarterly interest rate for determining payments was 3% (approximately 12% annually). Mid-South paid $25,000 for the truck. Both companies use straight-line depreciation or amortization. Anything Grows’ incremental interest rate is 12%.

1. Calculate the amount of selling profit that Mid-South would recognize in this sales-type lease. (Be careful to note that, although payments occur on the last calendar day of each quarter, since the first payment was at the beginning of the lease, payments represent an annuity due.)
2. Prepare the appropriate entries for Anything Grows and Mid-South on September 30, 2018.
3. Prepare an amortization schedule(s) describing the pattern of interest expense for Anything Grows and interest revenue for Mid-South Auto Leasing over the lease term.
4. Prepare the appropriate entries for Anything Grows and Mid-South Auto Leasing on December 31, 2018.
5. Prepare the appropriate entries for Anything Grows and Mid-South on September 29, 2020, assuming the purchase option was exercised on that date.

Business Case – Manchester Business School (Civil Engineering)

The Company (Civil Engineers) consists of two divisions. The divisions are Transportation and Infrastructure. The company sells engineering services to various customers. The following are the bill rates for the various staff classifications:

The two divisions expect to bill the following hours:

• Transportation - 10,000 hours, vice president at 10% of the time, 20% of Senior Engineer time 10% to Associate engineers and remaining to Staff Engineers.

• Infrastructure - 6,000 hours, vice president at 12% of the time, 20% of Senior Engineer time, 5% to Associate engineers and remaining to Staff Engineers.

The Direct Labor costs per hours are as follows:

The utilization (billable ratio to total hours) for each staff member is as follows:

The company has the following other costs:

Assume that there are 2080 hours per year that each engineer can work including vacation and other benefit hours.

Question:

You are an outside third party Human Resources consulting firm and the Manchester Company Board of Directors, CFO and the CPO have engaged your company. The goal of the Board, CFO and the CPO is to improve profitability of the divisions and company. Therefore, to accomplish providing engagement advice to the Board, CFO and CPO the consulting team should answer the following questions during the presentation and in the final report.

1. Prepare a static budget for the company.

2. Assume that the actual utilization came in at the following rates:

3. Based on the above utilization, prepare a flexible budget and calculate the Level 2/3 variances.

4. What recommendations can be made for the upcoming year in budgeting to the CFO for additional profitability and increasing revenue?

5. What approaches would your recommendations to increase the company overall utilization of staff and billable hours?

6. How will your recommendations impact customer profitability or divisional profitability?

7. The company wants to add a new division. It will be the Construction Division with 3 people. Please discuss pros and cons of adding a division and when you might consider not adding the division.

Suppose a natural gas distribution company has capital investments of $8 million and a capital cost r of 10%. The firm’s operating, billing, and maintenance costs are $200,000. The firm buys natural gas at the city gate price of $5/MCF to sell to its customers. The firm distributes gas to those customers through its existing pipeline network at close to zero marginal cost.

The firm faces the following (inverse) demand by customer type (recall that these are average demand per customer, so at any given price you have to multiply quantity by the number of customers to get total quantity demanded in that customer group):

Residential (10,000 customers): P = 50 − 5*q

Commercial (1,000 customers): P = 50 − q

Industrial (100 customers): P = 20 − 1/100 * q

Calculate the two-part tariff if the firm charges each customer the same two-part tariff and charges P = MC as the variable charge. What is the deadweight loss in this case?

Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $23.45 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below:

The total cost of operating the company for the year is $363,000 which includes the following costs:

Resource consumption is distributed across the activities as follows:

Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on.

Required:

1. Prepare the first-stage allocation of costs to the activity cost pools.

2. Compute the activity rates for the activity cost pools.

3. The company recently completed a 600 square foot carpet-cleaning job at the Flying N Ranch—a 58-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system.

4. The revenue from the Flying N Ranch was $140.70 (600 square feet @ $23.45 per hundred square feet). Calculate the customer margin earned on this job.

Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $22.70 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below:

The total cost of operating the company for the year is $345,000 which includes the following costs:

Resource consumption is distributed across the activities as follows:

Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on.

Required:

1. Prepare the first-stage allocation of costs to the activity cost pools.

2. Compute the activity rates for the activity cost pools.

3. The company recently completed a 200 square foot carpet-cleaning job at the Flying N Ranch—a 57-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system.

4. The revenue from the Flying N Ranch was $45.40 (200 square feet @ $22.70 per hundred square feet). Calculate the customer margin earned on this job.

allatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $22.60 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below:

The total cost of operating the company for the year is $366,000 which includes the following costs:

Resource consumption is distributed across the activities as follows:

Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on.

Required:

1. Prepare the first-stage allocation of costs to the activity cost pools.

2. Compute the activity rates for the activity cost pools.

3. The company recently completed a 600 square foot carpet-cleaning job at the Flying N Ranch—a 59-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system.

4. The revenue from the Flying N Ranch was $135.60 (600 square feet @ $22.60 per hundred square feet). Calculate the customer margin earned on this job.

Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $23.15 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below:

The total cost of operating the company for the year is $346,000 which includes the following costs:

Resource consumption is distributed across the activities as follows:

Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on.

Required:

1. Prepare the first-stage allocation of costs to the activity cost pools.

2. Compute the activity rates for the activity cost pools.

3. The company recently completed a 600 square foot carpet-cleaning job at the Flying N Ranch—a 51-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system.

4. The revenue from the Flying N Ranch was $138.90 (600 square feet @ $23.15 per hundred square feet). Calculate the customer margin earned on this job.

Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $22.90 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below: Activity Cost Pool Activity Measure Activity for the Year Cleaning carpets Square feet cleaned (00s) 14,000 hundred square feet Travel to jobs Miles driven 92,500 miles Job support Number of jobs 1,700 jobs Other (organization-sustaining costs and idle capacity costs) None Not applicable The total cost of operating the company for the year is $361,000 which includes the following costs: Wages $ 145,000 Cleaning supplies 27,000 Cleaning equipment depreciation 16,000 Vehicle expenses 34,000 Office expenses 60,000 President’s compensation 79,000 Total cost $ 361,000 Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities Cleaning Carpets Travel to Jobs Job Support Other Total Wages 79 % 11 % 0 % 10 % 100 % Cleaning supplies 100 % 0 % 0 % 0 % 100 % Cleaning equipment depreciation 69 % 0 % 0 % 31 % 100 % Vehicle expenses 0 % 80 % 0 % 20 % 100 % Office expenses 0 % 0 % 64 % 36 % 100 % President’s compensation 0 % 0 % 28 % 72 % 100 % Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on. Required: 1. Prepare the first-stage allocation of costs to the activity cost pools. 2. Compute the activity rates for the activity cost pools. 3. The company recently completed a 200 square foot carpet-cleaning job at the Flying N Ranch—a 50-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system. 4. The revenue from the Flying N Ranch was $45.80 (200 square feet @ $22.90 per hundred square feet). Calculate the customer margin earned on this job.

Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $22.20 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below:

The total cost of operating the company for the year is $352,000 which includes the following costs:

Resource consumption is distributed across the activities as follows:

Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on.

Required:

1. Prepare the first-stage allocation of costs to the activity cost pools.

2. Compute the activity rates for the activity cost pools.

3. The company recently completed a 400 square foot carpet-cleaning job at the Flying N Ranch—a 59-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system.

4. The revenue from the Flying N Ranch was $88.80 (400 square feet @ $22.20 per hundred square feet). Calculate the customer margin earned on this job.