7. Explain how a sales order, a production order, a materials requisition form, and a labor time ticket are involved in producing and costing products.

8. Why do companies use predetermined overhead rates rather than actual manufacturing overhead costs to apply overhead to jobs?

9. If a company fully allocates all of its overhead costs to jobs, does this guarantee that a profit will be earned for the period?

10. Provide two reasons why overhead might be under-applied in a given year.

Recent election cycles have brought new challenges for corporations and their boards of directors. For example, in the 2016 presidential election campaign, candidate Hillary Clinton unveiled a prescription drug plan to lower prescription prices following the Turing Pharmaceutical price gouging scandal. Yet ironically, the pharmaceutical industry was one of the most generous industry donators to her campaign, as well as those of the other candidates.In fact, the health industry overall (including health professionals, hospitals, HMOs, and pharmaceutical companies) donated over $10 million to the presidential candidates by spring of 2016.

In essence, the pharmaceutical companies and health-care professionals spent money to promote policies that went against their own financial interests. This happened in congressional elections as well. In 2010, the pharmaceutical industry’s trade group, PhRMA, donated funds to nonprofit groups that used those funds to help elect 23 representatives who subsequently voted to limit access to contraceptives.

Some of those funds came from firms like Pfizer, Bayer, and Merck —all manufacturers of contraceptives.Political spending is also an issue with individual companies. Target Corporation, a company that had positioned itself as an LGBT-friendly corporation, found itself the target of angry employees and customers when they learned about Target’s political spending. Target, a sponsor of the annual Twin Cities homosexual Pride Festival, donated money to a business group that supported an homosexual rights candidate for Minnesota governor. Angry employees and consumers conducted protests outside Target stores and threatened a boycott.

These examples show how political spending can have dramatic consequences for corporations. Politicians take positions on a range of policies and so the same politician may hold some positions that support and other positions that damage a corporation’s best interests. This problem was exacerbated when the U.S.Supreme Court’s Citizen United decision changed the political spending landscape for corporations. Before that decision, political spending was constrained to political action committees (PACs), and PAC political activity had to be disclosed to the FEC (Federal Election Commission). Now firms can make unlimited contributions directly to candidates or indirectly to 501c4 nonprofits and trade associations, who can then hide both the donors who provided the money and the way the money was spent. Firms are now freer to become politically involved but, as Target and the pharmaceutical companies found out, that freedom comes with risk.Shareholders and other stakeholders are asking firms to be transparent in their political spending. They want to judge those expenditures for themselves to avoid agency problems and other conflicts of interest.

Ira M. Millstein, founder of the Ira M. Millstein Center for Global Markets and Corporate Ownership at Columbia Law School, proposes a new policy for boards of directors to follow in this new landscape. He suggests that:

1.Companies should require trade associations of which they are members to report to them on their political spending,

2.Companies should require trade associations of which they are members to disclose the donors who provide the money for their political spending,and

3.Companies should then disclose the information they receive from their trade associations when they disclose their other spending to shareholders and other stakeholders.

DISCUSSIONQUESTIONS

1.How would you react to the problem of political spending?

2.As the Chief Executive Officer of a pharmaceutical company, what would you do? Would you retain your PhRMA membership? Would you attach any conditions to your membership?

3.How would you react to the Target situation? What would you do as the CEO?

4.What is your reaction to Ira Millstein’s suggestions? Should corporations demand that trade associations disclose this information before they join?

5.Should companies start disclosing the information they gather? If a trade association refuses to give up that information, should the company decline to join?

Recent election cycles have brought new challenges for corporations and their boards of directors. For example, in the 2016 presidential election campaign, candidate Hillary Clinton unveiled a prescription drug plan to lower prescription prices following the Turing Pharmaceutical price gouging scandal. Yet ironically, the pharmaceutical industry was one of the most generous industry donators to her campaign, as well as those of the other candidates. In fact, the health industry overall (including health professionals, hospitals, HMOs, and pharmaceutical companies) donated over $10 million to the presidential candidates by spring of 2016. In essence, the pharmaceutical companies and health-care professionals spent money to promote policies that went against their own financial interests. This happened in congressional elections as well. In 2010, the pharmaceutical industry’s trade group, PhRMA, donated funds to nonprofit groups that used those funds to help elect 23 representatives who subsequently voted to limit access to contraceptives. Some of those funds came from firms like Pfizer, Bayer, and Merck — all manufacturers of contraceptives. Political spending is also an issue with individual companies. Target Corporation, a company that had positioned itself as an LGBT-friendly corporation, found itself the target of angry employees and customers when they learned about Target’s political spending. Target, a sponsor of the annual Twin Cities G4y Pride Festival, donated money to a business group that supported an antig4y rights candidate for Minnesota governor. Angry employees and consumers conducted protests outside Target stores and threatened a boycott. These examples show how political spending can have dramatic consequences for corporations. Politicians take positions on a range of policies and so the same politician may hold some positions that support and other positions that damage a corporation’s best interests. This problem was exacerbated when the U.S. Supreme Court’s Citizen United decision changed the political spending landscape for corporations. Before that decision, political spending was constrained to political action committees (PACs), and PAC political activity had to be disclosed to the FEC (Federal Election Commission). Now firms can make unlimited contributions directly to candidates or indirectly to 501c4 nonprofits and trade associations, who can then hide both the donors who provided the money and the way the money was spent. Firms are now freer to become politically involved but, as Target and the pharmaceutical companies found out, that freedom comes with risk. Shareholders and other stakeholders are asking firms to be transparent in their political spending. They want to judge those expenditures for themselves to avoid agency problems and other conflicts of interest. Ira M. Millstein, founder of the Ira M. Millstein Center for Global Markets and Corporate Ownership at Columbia Law School, proposes a new policy for boards of directors to follow in this new landscape. He suggests that: 1. Companies should require trade associations of which they are members to report to them on their political spending, 2. Companies should require trade associations of which they are members to disclose the donors who provide the money for their political spending, and 3. Companies should then disclose the information they receive from their trade associations when they disclose their other spending to shareholders and other stakeholders.

1. How would you react to the problem of political spending?

2. As the Chief Executive Officer of a pharmaceutical company, what would you do? Would you retain your PhRMA membership? Would you attach any conditions to your membership?

3. How would you react to the Target situation? What would you do as the CEO?

4. What is your reaction to Ira Millstein’s suggestions? Should corporations demand that trade associations disclose this information before they join?

5. Should companies start disclosing the information they gather? If a trade association refuses to give up that information, should the company decline to join?

1. Charlotte, Inc. began business on January 1, 2017. Its pretax financial income for the first two year was as follows:

The following Items cased the only differences between pretax financial income and taxable income.

i. In 2017, the company collected $105,000 of rent; of this amount, $35,000 was earned in 2017; the other $70,000 will be earned equally over the 2018-19 period. The full $105,000 was included in the taxable income in 2017.

ii. In 2017, the company reported depreciation expense in its financial statements of $80,000. Depreciation expense for tax purposes was 110,000. The difference will revere evenly over the next three years (2018-2020).

The tax rate in 2017 is 30% and no tax rate changes are enacted during the three year period.

Required:

a. Determine taxable income for 2017 and 2018.

b. Determine the deferred income taxes at the end of 2017, and prepare the journal entry to record income taxes for 2017.

c. Determine the deferred income taxes at the end of 2018, and prepare the journal entry to record income taxes for 2018.

d. Prepare the Income Tax section of the income statement, starting with Pretax Net Income and ending with Net Income after Taxes for both 2017 and 2018.

1. Trend Analysis

   Critelli Company has provided the following comparative information:

   	Year 5		Year 4		Year 3		Year 2		Year 1
   Net income	$1,283,300		$1,106,300		$929,700		$794,600		$673,400
   Interest expense	436,300		398,300		344,000		262,200		208,800
   Income tax expense	410,656		309,764		260,316		206,596		161,616
   Average total assets	7,676,786		6,777,477		5,789,545		4,915,349		4,181,043
   Average stockholders' equity	2,629,713		2,353,830		2,056,858		1,822,477		1,595,735

   You have been asked to evaluate the historical performance of the company over the last five years.

   Selected industry ratios have remained relatively steady at the following levels for the last five years:

   	Industry Ratios
   Return on total assets	22.1 %
   Return on stockholders’ equity	45.6 %
   Times interest earned	4.6

   Instructions:

   Calculate three ratios for Year 1 through Year 5. Round to one decimal place.

   a. Return on total assets:

   Year 5	%
   Year 4	%
   Year 3	%
   Year 2	%
   Year 1	%

   b. Return on stockholders’ equity:

   Year 5	%
   Year 4	%
   Year 3	%
   Year 2	%
   Year 1	%

   c. Times interest earned:

   Year 5
   Year 4
   Year 3
   Year 2
   Year 1

Trend Analysis

Critelli Company has provided the following comparative information:

You have been asked to evaluate the historical performance of the company over the last five years.

Selected industry ratios have remained relatively steady at the following levels for the last five years:

Instructions:

Calculate three ratios for Year 1 through Year 5. Round to one decimal place.

a. Return on total assets:

b. Return on stockholders’ equity:

c. Times interest earned:

Aritelli Company has provided the following comparative information:

You have been asked to evaluate the historical performance of the company over the last five years.

Selected industry ratios have remained relatively steady at the following levels for the last five years:

Instructions:

Calculate three ratios for Year 1 through Year 5. Round to one decimal place.

a. Return on total assets:

b. Return on stockholders' equity:

c. Times interest earned:

Managing a diverse workforce is challenging task, especially in the context of effectuating change. Due to advancements of technology and rapid globalization, the world is getting smaller and workforce diversity is enriching the game.

Individual behaviour at workplace is influenced by many variables. Assuming you are serving as a senior consultant to a multinational company in a downsizing project (make the organization smaller by shedding staff) describe your suggestions with sufficient examples. (600 words)

Assignment 02

Managing a diverse workforce is challenging task, especially in the context of effectuating change. Due to advancements of technology and rapid globalization, the world is getting smaller and workforce diversity is enriching the game.

Individual behaviour at workplace is influenced by many variables. Assuming you are serving as a senior consultant to a multinational company in a downsizing project (make the organization smaller by shedding staff) describe your suggestions with sufficient examples.

Activity 2. Now that you know the essential terms in climate and biodiversity, let us try to check your understanding of these terms. In the space provided, differentiate the following:

1.   Deciduous forest from evergreen forest.

2.   Woodland from shrubland

3. Tropical rainforest from tropical seasonal forest

4. Savanna from thornwood

5. Weather and climate