Questions
THE COMPANY HISTORY Callaway Golf got its start in 1982 when the late Ely R. Callaway...

THE COMPANY HISTORY
Callaway Golf got its start in 1982 when the late Ely R. Callaway invested $400,000 for half interest in a golf club company called Hickory Stick. Callaway-Hickory, later renamed Callaway Golf, had sales of just $22 million in 1990 and was considered a small player as an OEM (original equipment manufacturer) for golf clubs. Callaway Golf made golf history and truly established itself in 1991 with the introduction of a very popular stainless-steel driver called “The Big Bertha.” The Big Bertha driver was soon followed by one of the biggest- selling drivers of all time, the titanium headed “Great Big Bertha.”
The success of the Big Bertha products—drivers,
irons, and fairway woods—made Callaway Golf a major player in the golf club business and the oversized tita- nium driver explosion was on. The Big Bertha name and product line continued with Steelhead, Hawkeye, ERC, C4, and ERC Fusion. Recent additions include the FT-3, FT-5, and FT-i irons and drivers, the Odyssey putter line—the most popular putter in the United States, Europe, and Japan—as well as the Callaway Golf X Ju- nior set for 8- to 12-year-olds with a manufacturer’s sug- gested retail price of $275.
By 2007 Callaway revenues exceeded $1.0 billion annually, making Callaway Golf one of the major OEMs in the business of golf. Callaway sells drivers and fairway woods, irons, and putters under the Callaway, Odyssey, Ben Hogan, and Top-Flite brands and also markets balls and accessories such as golf bags, gloves, headwear, foot- wear, and umbrellas. The Callaway trademarks and ser- vice marks are also licensed for products such as golf apparel, watches, travel gear, and eyewear. In November 2006, Callaway launched an online store where customers can order pre-owned golf products.
BUYER BEHAVIOR
Golfers, pros, and amateurs experiment with drivers, fairway woods, and putters more than other clubs in their golf bags. Many top professionals and amateurs choose to play with their favorite irons for years before chang- ing. Callaway Golf made a cunning decision to enter the club market the way it did in the late 1980s and early 1990s. By introducing drivers and uniquely designed fairway woods, clubs that players often change in the constant quest for distance and accuracy, Callaway Golf quickly became a name and force in the golf club equip- ment business.

THE GLOBAL GOLF MARKET
The golf industry has a broad and diverse global market. The game is popular around the world. The game and the rules are essentially the same everywhere. Golfers share similar characteristics and interests—a beginning golfer or an avid golfer in the United States is not much differ- ent from a beginning golfer or an avid golfer in Australia or Germany.
APPENDIX D Alternate Cases
The professional golf tours have done much to link golf as a global sport. Golf enthusiasts from around the world can follow their sport and stars through televised tourna- ments, daily newspaper coverage, weekly golf journals, monthly golf magazines, and the Internet. Golf-related websites are among the most popular sites on the Internet. The Golf Channel on cable television continues to be a strong venue for direct product marketing as well as inter- national event coverage. Golf is truly a global sport. Courses and competitions exist in many countries and on every continent except Antarctica. Professional and ama- teur players from around the world compete and interact with a high degree of etiquette and sportsmanship. Golfers at all levels share ideas and experiences from the game.

D-15
There are notable differences among global golf mar- kets. Japanese golfers seek out technology and products to compensate for their smaller average stature. Savvy golf equipment manufacturers have developed clubs specifi- cally for the Japanese market with different head shapes, weight, lie angle, and shafts adjusted for the average Japanese golfer’s height. And the long or distance ball is very popu- lar. In the United States, distance balls are inexpensive and fairly low-tech. In Japan, distance balls can sell for up to 500 yen each or more than $49 per dozen. While many
U.S. golfers—regardless of ability—seek out the equip- ment used by professional golfers, Japanese golfers often think they are “not worthy” to use top-caliber equipment.
“In the U.S. we talk about the pyramid of influence and how the best players dictate what everyone else wants to buy,” says Maki Shinoda of Nike. “But in Japan, you basically need to flip the pyramid upside down.” This creates an interesting challenge for golf equipment manufacturers— technology sells, but manufacturers must also consider how best to position the product for the Japanese market so that it does not appear to be “too professional.”
COMPETITION
The golf equipment business is a highly congested and very competitive marketplace. Many merchants exist, and the field is constantly changing with new start-ups, mergers,
and acquisitions. Major equipment manufacturers include Titleist, TaylorMade, Callaway, and Ping. Adams, Cleve- land, Wilson, Mizuno, Nike, and others also compete for a slice of the multibillion-dollar worldwide golf equipment market. Almost all well-established club manufacturers have followed Callaway’s “Bigger Is Better” philosophy when it comes to the marketing and manufacturing of popu- lar drivers. In many respects, today’s design and engineer- ing for drivers has been a contest of who can make the most forgiving, longest-driving club that technology and the rules of golf allow. Premium clubs today not only offer technological innovation, forgiveness, power, distance, and accuracy, but they are also pushing the laws of physics and the rules of golf.
CALLAWAY’S INTERNATIONAL MARKETS
For Callaway Golf, the global market is a very big part of its total market, with about 44 percent of all sales coming from golfers in countries outside the United States in 2006. The global market has grown in importance since the U.S. market—estimated at 28.7 million golfers—is relatively stagnant in terms of participants and number of rounds played (around 500 million annually). In fact, for the first time since World War II, more golf courses closed in the United States in 2006 than opened.
The Japanese golf market has yet to recover from a se- vere economic downturn in the 1990s, and this has hurt Callaway and other golf equipment manufacturers. The typical Japanese golfer is male, spends approximately 480,000 yen ($4,500) per year on golf, and plays 6.8 times a year, practicing 9.5 times a year. Although the cost to golf in Japan has actually fallen as the economy struggled (which should have helped make golf more af- fordable, boosting rounds played), demographics are now a huge factor. Forecasts predicted that Japan would see negative population growth for the first time in its history in 2007. Younger golfers are working more hours to sup- port themselves and the aging Japanese population, leav- ing them fewer hours on the course to enjoy themselves.
One of the hottest Asian markets is South Korea. More than 30 percent of Korea’s 4 million golfers are women, compared to 10 percent of U.S. golfers. Korean women account for the lion’s share of the $600 million in golf and apparel/footwear sales tallied at retail compared to hard goods sales of $275 million. The female golf market is also growing faster than the male market in Korea. Pur- suing the style-conscious female golfer domestically and internationally would represent a change for most golf equipment manufacturers, including Callaway.
What appeals to style-conscious women golfers? The upscale Shisegae Department Store in Seoul provides

some insight. Shisegae devotes nearly an entire floor to golf equipment and apparel and nothing is cheap. Most of the customers are women. The TaylorMade r7 driver re- tails for 750,000 won ($810). Nearly every shirt costs at least $300! Form-fitting, stylish apparel is the norm. No khakis found here. The sale rack has a plethora of size large items, unlike U.S. stores where small sizes domi- nate among unsold merchandise.
Nike has a significant head start over many of its rivals in this market. Korean consumers aspire to look and dress like celebrities, and Nike has LPGA stars Michelle Wie and Grace Park endorsing and using Nike golf products.
ISSUES
In sports, it is often said that getting to the top is easier than staying there. Callaway Golf is faced with the bur- densome task of sustaining its phenomenal growth and market share against competitors in hot pursuit. Discount- ing and innovation by competitors are challenges that Callaway now faces. Fast followers like Adams Golf and others have developed and discounted products that cut into Callaway’s mainstay, the driver, fairway wood, and specialty club market. Callaway and others have been left swimming for higher ground, moving into discount stores such as Target, as discounting and dumping have changed the market share landscape. Callaway has often resisted discounting its premium product line.
Technology does drive the industry. In 2004, Adidas-
Soloman A.G. (TaylorMade) released a driver with tech- nological innovation unlike any other on the market. TaylorMade’s new driver, the r7 Quad, introduced a unique interchangeable weighting system that allows golfers to customize their driver for different course con- ditions and desired ball flight. More than three years later, the TaylorMade r7 was still arguably the most popu- lar driver on the market.
Other big players in the equipment business are also after Callaway’s market share and may pose a greater threat to Callaway’s long-term success. Titleist, Taylor- Made, and Ping are large enough and strong enough to survive any market slump and also have the resources to buy smaller successful companies and the technology to provide popular products.
Steps have been taken by golf’s ruling bodies—the United States Golf Association (USGA) in North America and the Royal and Ancient Golf Club of St. An- drews (R&A)—to limit driver head size (larger heads im- prove forgiveness on off-center hits) and coefficient of restitution (the springiness of the club face surface that creates a trampoline effect producing more distance). Many of the golf greats believe more should be done to protect the game and have bemoaned the fact that tech- nology and equipment advances have changed the game
D-16
for the worse. Jack Nicklaus says, “It used to be 80 per- cent shot making and about 20 percent power.” Those percentages have been reversed today, according to Nicklaus. Many classic golf courses have been rendered obsolete for professional tournaments by balls and clubs that allow players to reach the greens on par four holes in one shot and par fives in two shots.
There are calls to restrict the type of equipment pros can use for tournaments. Equipment manufacturers are not eager to back away from pursuing technological ad- vances. The vast majority of customers are amateurs looking for any edge to improve their games, and one way is through more forgiving equipment. What will happen to the “pyramid of influence” if the pros or even amateur tournaments have to be played with a “handicap” on con- forming equipment rather than the latest, greatest, most forgiving equipment? Will it protect the game and put more of the emphasis back on skill?
The newest and potentially biggest golf market is now emerging in China, where golf is becoming a popular choice for a growing population of young professionals.

Although there are currently only about 1 million Chinese golfers, an annual growth rate of 25 percent is forecast over the next five years. The key to future global growth for the golf equipment industry may be in the budding Chinese market or the growing Indian market, also ex- pected to grow at the same healthy rate as the Chinese market.
Questions
1. What are the pros and cons of a global versus a multi- domestic approach to marketing golf clubs for Callaway? Which approach do you feel would have more merit and why?
2. What are 3 significant environmental factors that could have a major impact on the marketing of golf clubs internationally? Briefly explain each factor you list.
3. What marketing mix recommendations would you have for Callaway as it attempts to increase international market share, especially in Asian markets? (price, product, promotion, place)



plz read case study and give the following answer

In: Finance

Challenge THE COMPANY HISTORY Callaway Golf got its start in 1982 when the late Ely R....

Challenge
THE COMPANY HISTORY
Callaway Golf got its start in 1982 when the late Ely R. Callaway invested $400,000 for half interest in a golf club company called Hickory Stick. Callaway-Hickory, later renamed Callaway Golf, had sales of just $22 million in 1990 and was considered a small player as an OEM (original equipment manufacturer) for golf clubs. Callaway Golf made golf history and truly established itself in 1991 with the introduction of a very popular stainless-steel driver called “The Big Bertha.” The Big Bertha driver was soon followed by one of the biggest- selling drivers of all time, the titanium headed “Great Big Bertha.”
The success of the Big Bertha products—drivers,
irons, and fairway woods—made Callaway Golf a major player in the golf club business and the oversized tita- nium driver explosion was on. The Big Bertha name and product line continued with Steelhead, Hawkeye, ERC, C4, and ERC Fusion. Recent additions include the FT-3, FT-5, and FT-i irons and drivers, the Odyssey putter line—the most popular putter in the United States, Europe, and Japan—as well as the Callaway Golf X Ju- nior set for 8- to 12-year-olds with a manufacturer’s sug- gested retail price of $275.
By 2007 Callaway revenues exceeded $1.0 billion annually, making Callaway Golf one of the major OEMs in the business of golf. Callaway sells drivers and fairway woods, irons, and putters under the Callaway, Odyssey, Ben Hogan, and Top-Flite brands and also markets balls and accessories such as golf bags, gloves, headwear, foot- wear, and umbrellas. The Callaway trademarks and ser- vice marks are also licensed for products such as golf apparel, watches, travel gear, and eyewear. In November 2006, Callaway launched an online store where customers can order pre-owned golf products.
BUYER BEHAVIOR
Golfers, pros, and amateurs experiment with drivers, fairway woods, and putters more than other clubs in their golf bags. Many top professionals and amateurs choose to play with their favorite irons for years before chang- ing. Callaway Golf made a cunning decision to enter the club market the way it did in the late 1980s and early 1990s. By introducing drivers and uniquely designed fairway woods, clubs that players often change in the constant quest for distance and accuracy, Callaway Golf quickly became a name and force in the golf club equip- ment business.

THE GLOBAL GOLF MARKET
The golf industry has a broad and diverse global market. The game is popular around the world. The game and the rules are essentially the same everywhere. Golfers share similar characteristics and interests—a beginning golfer or an avid golfer in the United States is not much differ- ent from a beginning golfer or an avid golfer in Australia or Germany.
APPENDIX D Alternate Cases
The professional golf tours have done much to link golf as a global sport. Golf enthusiasts from around the world can follow their sport and stars through televised tourna- ments, daily newspaper coverage, weekly golf journals, monthly golf magazines, and the Internet. Golf-related websites are among the most popular sites on the Internet. The Golf Channel on cable television continues to be a strong venue for direct product marketing as well as inter- national event coverage. Golf is truly a global sport. Courses and competitions exist in many countries and on every continent except Antarctica. Professional and ama- teur players from around the world compete and interact with a high degree of etiquette and sportsmanship. Golfers at all levels share ideas and experiences from the game.

D-15
There are notable differences among global golf mar- kets. Japanese golfers seek out technology and products to compensate for their smaller average stature. Savvy golf equipment manufacturers have developed clubs specifi- cally for the Japanese market with different head shapes, weight, lie angle, and shafts adjusted for the average Japanese golfer’s height. And the long or distance ball is very popu- lar. In the United States, distance balls are inexpensive and fairly low-tech. In Japan, distance balls can sell for up to 500 yen each or more than $49 per dozen. While many
U.S. golfers—regardless of ability—seek out the equip- ment used by professional golfers, Japanese golfers often think they are “not worthy” to use top-caliber equipment.
“In the U.S. we talk about the pyramid of influence and how the best players dictate what everyone else wants to buy,” says Maki Shinoda of Nike. “But in Japan, you basically need to flip the pyramid upside down.” This creates an interesting challenge for golf equipment manufacturers— technology sells, but manufacturers must also consider how best to position the product for the Japanese market so that it does not appear to be “too professional.”
COMPETITION
The golf equipment business is a highly congested and very competitive marketplace. Many merchants exist, and the field is constantly changing with new start-ups, mergers,
and acquisitions. Major equipment manufacturers include Titleist, TaylorMade, Callaway, and Ping. Adams, Cleve- land, Wilson, Mizuno, Nike, and others also compete for a slice of the multibillion-dollar worldwide golf equipment market. Almost all well-established club manufacturers have followed Callaway’s “Bigger Is Better” philosophy when it comes to the marketing and manufacturing of popu- lar drivers. In many respects, today’s design and engineer- ing for drivers has been a contest of who can make the most forgiving, longest-driving club that technology and the rules of golf allow. Premium clubs today not only offer technological innovation, forgiveness, power, distance, and accuracy, but they are also pushing the laws of physics and the rules of golf.
CALLAWAY’S INTERNATIONAL MARKETS
For Callaway Golf, the global market is a very big part of its total market, with about 44 percent of all sales coming from golfers in countries outside the United States in 2006. The global market has grown in importance since the U.S. market—estimated at 28.7 million golfers—is relatively stagnant in terms of participants and number of rounds played (around 500 million annually). In fact, for the first time since World War II, more golf courses closed in the United States in 2006 than opened.
The Japanese golf market has yet to recover from a se- vere economic downturn in the 1990s, and this has hurt Callaway and other golf equipment manufacturers. The typical Japanese golfer is male, spends approximately 480,000 yen ($4,500) per year on golf, and plays 6.8 times a year, practicing 9.5 times a year. Although the cost to golf in Japan has actually fallen as the economy struggled (which should have helped make golf more af- fordable, boosting rounds played), demographics are now a huge factor. Forecasts predicted that Japan would see negative population growth for the first time in its history in 2007. Younger golfers are working more hours to sup- port themselves and the aging Japanese population, leav- ing them fewer hours on the course to enjoy themselves.
One of the hottest Asian markets is South Korea. More than 30 percent of Korea’s 4 million golfers are women, compared to 10 percent of U.S. golfers. Korean women account for the lion’s share of the $600 million in golf and apparel/footwear sales tallied at retail compared to hard goods sales of $275 million. The female golf market is also growing faster than the male market in Korea. Pur- suing the style-conscious female golfer domestically and internationally would represent a change for most golf equipment manufacturers, including Callaway.
What appeals to style-conscious women golfers? The upscale Shisegae Department Store in Seoul provides

some insight. Shisegae devotes nearly an entire floor to golf equipment and apparel and nothing is cheap. Most of the customers are women. The TaylorMade r7 driver re- tails for 750,000 won ($810). Nearly every shirt costs at least $300! Form-fitting, stylish apparel is the norm. No khakis found here. The sale rack has a plethora of size large items, unlike U.S. stores where small sizes domi- nate among unsold merchandise.
Nike has a significant head start over many of its rivals in this market. Korean consumers aspire to look and dress like celebrities, and Nike has LPGA stars Michelle Wie and Grace Park endorsing and using Nike golf products.
ISSUES
In sports, it is often said that getting to the top is easier than staying there. Callaway Golf is faced with the bur- densome task of sustaining its phenomenal growth and market share against competitors in hot pursuit. Discount- ing and innovation by competitors are challenges that Callaway now faces. Fast followers like Adams Golf and others have developed and discounted products that cut into Callaway’s mainstay, the driver, fairway wood, and specialty club market. Callaway and others have been left swimming for higher ground, moving into discount stores such as Target, as discounting and dumping have changed the market share landscape. Callaway has often resisted discounting its premium product line.
Technology does drive the industry. In 2004, Adidas-
Soloman A.G. (TaylorMade) released a driver with tech- nological innovation unlike any other on the market. TaylorMade’s new driver, the r7 Quad, introduced a unique interchangeable weighting system that allows golfers to customize their driver for different course con- ditions and desired ball flight. More than three years later, the TaylorMade r7 was still arguably the most popu- lar driver on the market.
Other big players in the equipment business are also after Callaway’s market share and may pose a greater threat to Callaway’s long-term success. Titleist, Taylor- Made, and Ping are large enough and strong enough to survive any market slump and also have the resources to buy smaller successful companies and the technology to provide popular products.
Steps have been taken by golf’s ruling bodies—the United States Golf Association (USGA) in North America and the Royal and Ancient Golf Club of St. An- drews (R&A)—to limit driver head size (larger heads im- prove forgiveness on off-center hits) and coefficient of restitution (the springiness of the club face surface that creates a trampoline effect producing more distance). Many of the golf greats believe more should be done to protect the game and have bemoaned the fact that tech- nology and equipment advances have changed the game
D-16
for the worse. Jack Nicklaus says, “It used to be 80 per- cent shot making and about 20 percent power.” Those percentages have been reversed today, according to Nicklaus. Many classic golf courses have been rendered obsolete for professional tournaments by balls and clubs that allow players to reach the greens on par four holes in one shot and par fives in two shots.
There are calls to restrict the type of equipment pros can use for tournaments. Equipment manufacturers are not eager to back away from pursuing technological ad- vances. The vast majority of customers are amateurs looking for any edge to improve their games, and one way is through more forgiving equipment. What will happen to the “pyramid of influence” if the pros or even amateur tournaments have to be played with a “handicap” on con- forming equipment rather than the latest, greatest, most forgiving equipment? Will it protect the game and put more of the emphasis back on skill?
The newest and potentially biggest golf market is now emerging in China, where golf is becoming a popular choice for a growing population of young professionals.

Although there are currently only about 1 million Chinese golfers, an annual growth rate of 25 percent is forecast over the next five years. The key to future global growth for the golf equipment industry may be in the budding Chinese market or the growing Indian market, also ex- pected to grow at the same healthy rate as the Chinese market.
Questions
1. What are the pros and cons of a global versus a multi- domestic approach to marketing golf clubs for Callaway? Which approach do you feel would have more merit and why?
2. What are 3 significant environmental factors that could have a major impact on the marketing of golf clubs internationally? Briefly explain each factor you list.
3. What marketing mix recommendations would you have for Callaway as it attempts to increase international market share, especially in Asian markets? (price, product, promotion, place)


read case study and give answer

In: Accounting

familiarize with the resources available pertaining to MROs, as well as broaden your knowledge of the...

familiarize with the resources available pertaining to MROs, as well as broaden your knowledge of the industry. After conducting research of the article below, write a synopsis of your findings.

WASHINGTON—The FAA has released long-awaited policy on using video links and other “remote technology” to conduct inspections and help validate regulatory compliance, adding to a growing set of procedural changes meant to accommodate social distancing during the coronavirus pandemic. The March 31 policy statement covers using real-time and recorded video “to perform prototype conformity inspections, engineering and ground tests, engineering compliance inspections, production conformity inspections, and inspections” for issuing 8130-3s, or airworthiness approval tags. “Remote technology may have limitations that could render it unsuitable for some applications,” the FAA said. “Accordingly, careful consideration and risk management should be applied when making a determination when to use it.” Among the considerations: the “complexity, novelty, and safety criticality of the product, article, or system being inspected or tested,” the policy said. The agency also noted that using video for “engineering compliance inspections of complex interiors” has been “challenging and often unacceptable” in the past, so Aircraft Certification Offices (ACOs) “should take extra precaution” when using video for such checks. Applicants that want to use remote technology should work with their local ACO and incorporate specific details in certification, engineering test, or conformity inspection plans. Production-approval holders that use remote technology for 8180-3 inspections must have the procedures in their quality systems. Organization Designation Authorization holders also can incorporate remote inspections into their programs. “The bottom line is that the agency can allow the use of any technology that achieves the purpose of the regulation and will be part of an application or showing of compliance,” said the Aeronautical Repair Station Association, part of a group of industry stakeholders that has been urging the FAA to expand inspectors’ use of remote-technology for several years. “This policy is a step in the direction industry needs the government to go.” The policy is part of an expanding set of guidance that the FAA has issued to help ensure it can maintain oversight, and industry can comply with regulations, while it waits out the COVID-19 crisis. Other changes have granted exemptions to training normally done in person, or extensions to expiring licenses, such as pilot medical certificates that require non-emergency check-ups to renew. The FAA also has relaxed its requirement for annual in-person surveillance of agency-certificated repair stations outside of the U.S. The change grants certificate-expiration extensions to shops that have been approved for at least a year, even if the FAA’s required surveillance is not done. Newly certificated shops still will be inspected within their first year and will not get extensions, the agency added.

In: Operations Management

Factory Closing Decision The Dough Knot Corporation bakes breads, pastries, cookies and every other baked good...

Factory Closing Decision

The Dough Knot Corporation bakes breads, pastries, cookies and every other baked good imaginable. The company has a number of factories around the world, including the LACC Cookie Factory, which makes... cookies.

Michael Schrute is the factory manager of the LACC Cookie Factory but also serves as the regional production manager for the company. His budget as the regional manager is charged to the LACC Cookie Factory.

Schrute has just heard that The Dough Knot has received a bid from an outside vendor to supply the equivalent of the entire annual output of the LACC Cookie Factory for $34 million. Schrute was astonished at the low outside bid because the budget for the LACC Cookie Factory’s operating costs for the upcoming year was set at $50.3 million. If this bid is accepted, the LACC Cookie Factory will be closed down.

The budget for LACC Cover’s operating costs for the coming year is presented below.

LACC Cookie Factory Annual Budget for Operating Costs
Baking flour 2,500,000
Butter 3,700,000
Chocolate 2,400,000
Sugar 6,000,000
Baking Employees 12,000,000
Cleaning Employees 1,500,000
Security Employees 3,000,000
Supervisors 1,000,000
Factory Manager and Staff 900,000
Pension Expense 4,000,000
Corporate Expense 3,800,000
Depreciation-Building 6,000,000
Depreciation-Equipment 3,500,000
Total Budgeted Costs 50,300,000

*Fixed corporate expenses allocated to factories and other operating units based on total budgeted wage and salary costs.

Additional facts regarding the factory’s operations are as follows:

A. Due to LACC Cookie’s commitment to use high-quality ingredients in all of its products, the Purchasing Department was instructed to place blanket purchase orders with major suppliers to ensure the receipt of sufficient materials for the coming year. If these orders are canceled as a consequence of the factory closing, termination charges would amount to 25% of the cost of direct materials.

B. Approximately 400 factory employees will lose their jobs if the factory is closed. This includes all of the direct laborers and supervisors as well as the plumbers, electricians, and other skilled workers classified as indirect factory workers. Some would be able to find new jobs while many others would have difficulty. All employees would have difficulty matching LACC Cookie’s base pay of $18.80 per hour, which is the highest in the area. A clause in LACC Cookie’s contract with the union may help some employees; the company must provide employment assistance to its former employees for 12 months after a factory closing. The estimated cost to administer this service would be $1.6 million for the year.

C. Some employees would probably choose early retirement because The Dough Knot has an excellent pension plan. In fact, $2.5 million of the annual pension expense would continue whether LACC Cookie is open or not.

D. Schrute and his staff would not be affected by the closing of LACC Cover. They would still be responsible for administering three other area factories.

E. If the LACC Cookie Factory were closed, the company would realize about $3.3 million salvage value for the equipment and building. If the factory remains open, there are no plans to make any significant investments in new equipment or buildings. The old equipment is adequate and should last indefinitely.

Required:

The Dough Knot Corporation plans to prepare a financial analysis that will be used in deciding whether or not to close the LACC Cookie Factory. Management has asked you to identify:

1. Without regard to costs, identify the advantages to Dough Knot Corporation of continuing to operate LACC Cookie Factory (200 word minimum).

2. The annual budgeted costs that are relevant to the decision regarding closing the factory.

3. The annual budgeted costs that are not relevant to the decision regarding closing the factory.

4. Any nonrecurring costs that would arise due to the closing of the factory. Looking at the data you have prepared above,

5. Calculate the financial advantage (disadvantage) of closing the factory.

6. Should the factory be closed? Explain your calculations and support your argument. It’s your job to convince the CEO of your decision (500 words minimum).

(Part of your score will be based on your ability to argue your strategy. You may come to the correct numerical calculation, but if you cannot convey your message your recommendation will fall flat with the CEO. The word minimums refer to #1 and #6. For questions 2-5, you should show your calculations and support your argument, as if you were making a presentation to management.)

In: Accounting

5.            In 2016, over 42,000 people were killed by opioid overdoses. The effects of the issue...

5.            In 2016, over 42,000 people were killed by opioid overdoses. The effects of the issue are not limited to fatalities. An additional issue is the lack of proper development among young adolescent users during a critical phase of brain maturation. One method of reducing opioid abuse is to reduce the availability of prescription opioids.   In 2010, 54 percent of students in 12th grade believed that prescription opioids were easily accessible. In a 2017 study, one agency surveyed three high schools in the northeast and found 266 of the 500 12th grade students surveyed believed prescription opioids were easily accessible in their community.

                a.            Is the above information sufficient for you to be certain that the percentage of all 12th graders who believe prescription opioids are easily accessible has declined? Why or why not?

                b.            In establishing a statistical hypothesis testing of this situation, give the required null and alternative hypotheses for a test to determine if the percent of 12th graders who believe opioids are easily accessible has declined from 2010.

                                                H0:

                                                H1:

                c.             Based on your answer in part b, should you use a right-tailed, a left-tailed, or a two-tailed test? Briefly explain how one determines which of the three possibilities is to be used.            

                d.            Describe the possible Type I error for this situation--make sure to state the error in terms of the percent of 12th graders and their beliefs about opioid accessibility.                                          

                e.            Describe the possible Type II error for this situation--make sure to state the error in terms of the percent of 12th graders and their beliefs about opioid accessibility.          

                f.             Determine the appropriate critical value(s) for this situation given a 0.01 significance level.           

                g.            Determine/calculate the value of the sample's test statistic.         

                h.            Determine the P-value.                                                                

                i.              Based upon your work above, should you "Reject the null hypothesis" or "Fail to reject the null hypothesis?" Explain why.

                j.             Based upon your work above (and overlooking the flaws in the survey method), is there statistically sufficient evidence in this sample to support the claim that the percent of 12th graders who believe opioids are easily accessible has declined from 2010? Briefly explain your reasoning.

In: Statistics and Probability

Your friend, Liz, loves to shop at Target and is now interested in investing in the...

Your friend, Liz, loves to shop at Target and is now interested in investing in the company. Tom, another friend, has told her that Target’s debt structure is risky with obligations of nearly 74% of total assets. Liz sees that debt on the balance sheet is 65% of total assets and is confused by Tom’s comment. Write an explanation to Liz discussing the debt structure of Target and why Tom thinks Target is risky. Be sure to explain clearly what information appears on financial statements, as well as what information does not appear directly on the financial statements. Use the information below in your discussion.

At fiscal year-end February 2, 2008, Target Corporation had the following assets and liabilities on its balance sheet (in millions):

Current liabilities $11,782
Long-term debt 15,126
Other liabilities 2,345
Total assets 44,560

Target reported the following information on leases in the notes to the financial statements:

Total rent expense was $165 million in 2007, $158 million in 2006, and $154 million in 2005, including percentage rent expense of $5 million in 2007, 2006, and 2005. Most long-term leases include one or more options to renew, with renewal terms that can extend the lease term to more than 50 years. Certain leases also include options to purchase the leased property.

Future minimum lease payments required under non-cancellable lease agreements existing at February 2, 2008, were:

Future Minimum Lease Payments (in Millions) Operating Leases Capital Leases
2008 $ 239 $ 12
2009 187   16
2010    173   16
2011    129   16
2010    123   17
After 2010 2, 843   155
Total future minimum lease payments $3694 (a) $232
Less: Interest (b) (105)
Present value of minimum capital lease payments $127 (c)

(a) Total contractual lease payments include $1,721 million related to options to extend lease terms that are reasonably assured of being exercised, and also include $98 million of legally binding minimum lease payments for stores that will open in 2008 or later.
(b) Calculated using the interest rate at inception of each lease.
(c) Includes current portion of $4 million.

In: Finance

Reporting and Analyzing Derivatives Assume Johnson & Johnson reports the following schedule of other comprehensive income...

Reporting and Analyzing Derivatives
Assume Johnson & Johnson reports the following schedule of other comprehensive income in its 2011 10-K report ($ millions):




($ in millions)

Foreign
currency
translation

Gains/(Losses)
on
Securities

Employee
Benefit
Plans
Gains/(Losses)
on
Derivatives &
Hedges		 Total
Accumulated
Other
Comprehensive
Income/(Loss)
January 3, 2010 $(409) $(10) (1,335) $125 $(1,629)
2010 changes
Unrealized gain (loss) -- 89 -- (250)
Net amount reclassed to net earnings -- (45) -- 188
Net 2010 changes (232) 44 (21) (62) (271)
January 2, 2011 $(641) $34 $(1,356) $63 $(1,900)

b. How does Johnson & Johnson report its derivatives as cash-flow hedges on its balance sheet?

Cash-flow hedges are reported at Answerfair valuecost on the balance sheet.

Changes in value are recognized on the Answerbalance sheet in AOCIincome statement as earningsnot applicable

c. By what amount have the unrealized gains/losses on the cash flow hedges affected current income?

Current income AnswerincreaseddecreasedN/A by $Answer million.

d. What does the $188 million classified as "Net amount reclassed to net earnings" relate to? How has this affected Johnson & Johnson's profit?

a) The unrealized gain has been reclassified from AOCI and recognized in current earnings relating to derivatives for which the underlying transaction concluded in the current year. This increase in AOCI is offset by a decrease in net income (and in retained earnings).

b) The unrealized loss has been reclassified from AOCI and recognized in current earnings relating to derivatives for which the underlying transaction concluded in the current year. This increase in AOCI is offset by a decrease in net income (and in retained earnings).

c) The unrealized gain has been reclassified from AOCI and recognized in current earnings relating to derivatives for which the underlying transaction concluded in the current year. This increase in AOCI is offset by an increase in net income (and in retained earnings).

d) The unrealized loss has been reclassified from AOCI and recognized in current earnings relating to derivatives for which the underlying transaction concluded in the current year. This increase in AOCI is offset by an increase in net income (and in retained earnings).

In: Accounting

Show ALL work Ratio Analysis. The Williams Corporation’s forecasted 2010 financial statements follow, along with some...

Show ALL work

Ratio Analysis. The Williams Corporation’s forecasted 2010 financial statements follow, along with some industry average ratios.

Forecasted Balance Sheet as of December 31, 2010

Cash

$ 72,000

Accounts receivables

$ 439,000

Accounts and notes payable

$ 432,000

Inventories

$ 894,000

Accruals

$ 170,000

Total current assets

$1,405,000

Total current liabilities

$ 602,000

Land and building

$ 238,000

Long-term debt

$ 404,290

Machinery

$ 132,000

Common stock

$ 575,000

Other fixed assets

$ 61,000

Retained earnings

$ 254,710

Total assets

$1,836,000

Total liabilities and equity

$1,836,000

Forecasted Income Statement for 2010

Sales

$4,290,000

Cost of goods sold

$3,580,000

Per-Share Data

Gross operating profit

$ 710,000

EPS

$ 4.71

General admin & selling expenses

$ 236,320

DPS

$ 0.95

Depreciation

$ 159,000

P/E Ratio

5.00

Misc.

$ 134,000

Market price

$ 23.57

Earnings before Taxes

$ 180,680

Number of shares outstanding

23000

Taxes

$ 72,272

Net Income

$ 108,408

Industry Financial Ratios

William’s Financial Ratios

Ratio/Comment

Quick Ratio

1x

Quick Ratio

Current Ratio

2.7x

Current Ratio

Inventory Turnover

7x

Inventory Turnover

Days Sales Outstanding

40 days

Days Sales Outstanding

Fixed Asset Turnover

13x

Fixed Asset Turnover

Total Asset Turnover

2.6x

Total Asset Turnover

Return on Assets

9.10%

Return on Assets

Return on Equity

18.20%

Return on Equity

Debt Ratio

55%

Debt Ratio

Profit Margin on Sales

3.50%

Profit Margin on Sales

P/E Ratio

6x

P/E Ratio

a. Calculate the indicated ratios for William’s in the appropriate blanks.

b. Outline William’s strengths and weaknesses as compared to its industry. Be detailed in your ratio analysis.

c. Recommend at least three areas for correction. Be sure to support your recommendations.

d. Why is being trustworthy essential to success in the business world? Use at least two of the following scriptures to answer this question: Psalm 101:7, Proverbs 4:20-27, Proverbs 13:11, and Proverbs 28:12-13.

In: Accounting

Multiple choice questions. No need to explain. Question 21 Sandstrom Corporation has an extraordinary loss of...

Multiple choice questions. No need to explain.

Question 21

Sandstrom Corporation has an extraordinary loss of $50,000, an unusual gain of $35,000, and a tax rate of 40%. At what amount should Sandstrom report each item?

Extraordinary loss

Unusual gain

$(50,000)

$35,000

(50,000)

21,000

(30,000)

35,000

(30,000)

21,000

Question 22

The approach most companies use to provide information related to the components of other comprehensive income is a

second separate income statement.
combined income statement of comprehensive income.
separate column in the statement of changes in stockholders' equity.
footnote disclosure.

Question 23

The following information applied to Howe, Inc. for 2010:

Merchandise purchased for resale

$300,000

Freight-in

8,000

Freight-out

5,000

Purchase returns

2,000


What is ending inventory?

$300,000.
$303,000.
$306,000.
$311,000.

Question 24

The following information was derived from the 2010 accounting records of Perez Co.:

Perez's Goods

Perez 's Central Warehouse

Held by Consigness

Beginning inventory

$130,000

$ 14,000

Purchases

575,000

70,000

Freight-in

10,000

Transportation to consignees

5,000

Freight-out

30,000

8,000

Ending inventory

145,000

20,000


What is the cost of sales for 2010?

$570,000.
$600,000.
$634,000.
$639,000.

Question 25

The role of the Securities and Exchange Commission in the formulation of accounting principles can be best described as

consistently primary.
consistently secondary.
sometimes primary and sometimes secondary.
non-existent.

Question 26

The use of a Discounts Lost account implies that the recorded cost of a purchased inventory item is its

invoice price.
invoice price plus the purchase discount lost.
invoice price less the purchase discount taken.
invoice price less the purchase discount allowable whether taken or not.

Question 27

Trade discounts are

not recorded in the accounts; rather they are a means of computing a price.
used to avoid frequent changes in catalogues.
used to quote different prices for different quantities purchased.
all of the above.

Question 28

Under the cash basis of accounting, revenues are recorded

when they are earned and realized.
when they are earned and realizable.
when they are earned.
when they are realized.

Question 29

Under which section of the balance sheet is "cash restricted for plant expansion" reported?

Current assets.
Non-current assets.
Current liabilities.
Stockholders' equity.

In: Accounting

In 2016, over 42,000 people were killed by opioid overdoses. The effects of the issue are...

In 2016, over 42,000 people were killed by opioid overdoses. The effects of the issue are not limited to fatalities. An additional issue is the lack of proper development among young adolescent users during a critical phase of brain maturation. One method of reducing opioid abuse is to reduce the availability of prescription opioids.   In 2010, 54 percent of students in 12th grade believed that prescription opioids were easily accessible. In a 2017 study, one agency surveyed three high schools in the northeast and found 133 of the 270 12th grade students surveyed believed prescription opioids were easily accessible in their community.
a. Is the above information sufficient for you to be certain that the percentage of all 12th graders who believe prescription opioids are easily accessible has declined? Why or why not?
b. In establishing a statistical hypothesis testing of this situation, give the required null and alternative hypotheses for a test to determine if the percent of 12th graders who believe opioids are easily accessible has declined from 2010.
H0:
H1:
c. Based on your answer in part b, should you use a right-tailed, a left-tailed, or a two-tailed test? Briefly explain how one determines which of the three possibilities is to be used.
d. Describe the possible Type I error for this situation--make sure to state the error in terms of the percent of 12th graders and their beliefs about opioid accessibility.
e. Describe the possible Type II error for this situation--make sure to state the error in terms of the percent of 12th graders and their beliefs about opioid accessibility.
f. Determine the appropriate critical value(s) for this situation given a 0.05 significance level.
g. Determine/calculate the value of the sample's test statistic.
h. Determine the P-value.
i. Based upon your work above, should you "Reject the null hypothesis" or "Fail to reject the null hypothesis?" Explain why.
j. Based upon your work above (and overlooking the flaws in the survey method), is there statistically sufficient evidence in this sample to support the claim that the percent of 12th graders who believe opioids are easily accessible has declined from 2010? Briefly explain your reasoning.

In: Math