US-China Trade War

Research and explain the factors that you believe to have contributed to the trade dispute between the USA and China.

Give your opinion on whether there can be any winners or losers resulting from this conflict.

Why do US private sector unions typically oppose free trade agreements? From a historical perspective, why does the Democratic party oppose free trade while Republicans typically support it? What are the arguments.

Utilizing ONLY the information from all three chapters, explain how management has changed over the past 100 years. State five factors affecting the change and has led us to a global business environment.

What are two areas that you believe are primary contributors to the '08-'09 financial crisis for both the US and Iceland? Hello! Please help explain the two areas from an economic standpoint (preferably Macro but anything will do).

Structuring a Make-or-Buy Problem

Fresh Foods, a large restaurant chain, needs to determine if it would be cheaper to produce 5,000 units of its main food ingredient for use in its restaurants or to purchase them from an outside supplier for $12 each. Cost information on internal production includes the following:

Fixed overhead will continue whether the ingredient is produced internally or externally. No additional costs of purchasing will be incurred beyond the purchase price.

Required:

1. What are the alternatives for Fresh Foods?
Make the ingredient in house or buy it externally.

2. List the relevant cost(s) of internal production and of external purchase.

All of the above

3. Which alternative is more cost effective?
Make the ingredient in-house

By how much?
$

4. Now assume that 20% of the fixed overhead can be avoided if the ingredient is purchased externally. Which alternative is more cost effective?
Buy

By how much?
$

Determining the Optimal Product Mix with One Constrained Resource

Comfy Fit Company manufactures two types of university sweatshirts, the Swoop and the Rufus, with unit contribution margins of $5 and $15, respectively. Regardless of type, each sweatshirt must be fed through a stitching machine to affix the appropriate university logo. The firm leases seven machines that each provides 1,000 hours of machine time per year. Each Swoop sweatshirt requires 6 minutes of machine time, and each Rufus sweatshirt requires 20 minutes of machine time.

Assume that there are no other constraints.

Required:

1. What is the contribution margin per hour of machine time for each type of sweatshirt? When computing your answers, round machine time per unit to two decimal places. Round your final answers to the nearest dollar.

2. What is the optimal mix of sweatshirts? If an amount is zero, enter "0".

3. What is the total contribution margin earned for the optimal mix?
$

Determining the Optimal Product Mix with One Constrained Resource and a Sales Constraint

Comfy Fit Company manufactures two types of university sweatshirts, the Swoop and the Rufus, with unit contribution margins of $5 and $15, respectively. Regardless of type, each sweatshirt must be fed through a stitching machine to affix the appropriate university logo. The firm leases seven machines that each provides 1,000 hours of machine time per year. Each Swoop sweatshirt requires 6 minutes of machine time, and each Rufus sweatshirt requires 20 minutes of machine time.

Assume that a maximum of 40,000 units of each sweatshirt can be sold.

Required:

1. What is the contribution margin per hour of machine time for each type of sweatshirt? When computing your answers, round machine time per unit to two decimal places. Round your final answers to the nearest dollar.

2. What is the optimal mix of sweatshirts? When computing your answers, round machine time per unit to two decimal places. Round your final answers to the nearest whole unit.

3. What is the total contribution margin earned for the optimal mix?
$

ABC Inc.

Statement of Income

For the period October 1, 2018 to September 30, 2019

Revenue                                                                                                                       $15,800,000

Operating Expenses:

Rent                                                                                                      1,350,000

Advertising expense                                                                       1,105,000

Bad Debts                                                                                             179,000

Salaries and wages                                                                         3,800,000           

Interest                                                                                                3,150,000

Accounting and legal                                                                         195,000

Meals and entertainment                                                            1,300,000

Amortization                                                                                         750,000

Repairs and maintenance                                                                500,000

Automotive                                                                                        2,120,000        

Net Income from Operations                                                                             1,351,000                                                   

Gain on disposal of asset                                                                                         350,000

Net income before taxes                                                                                      1,701,000  

Income Taxes                                                                                                               635,000

Net Income                                                                                                            $1,066,000

Additional Information relating to the preparation of the statement of income for the period:

1. Legal fees of $120,000 were accrued at September 30, 2019 to reflect an estimate of potential legal fees for a threatened lawsuit against the company.
2. The company paid XYZ Advertising Inc. a total of $600,000 for advertising services for the period. It was decided that $243,000 be expensed in the current period and the remaining amount be capitalized as the company will benefit from this outlay in the following year.
3. Included in salaries and wages is a bonus accrual to the shareholder in the amount of $1,250,000. This amount was paid to the shareholder with appropriate source deductions (Income tax, CPP) on March 30, 2020.
4. Included in interest expense is $23,500 of interest paid to CCRA for late tax installments.
5. Included in repairs and maintenance is an accrual of $185,000 that represents potential warranty work for defective items sold.
6. Automotive expenses consists of company owned and or leased vehicles provided to employees of the company to perform their employment duties.
7. During the period the company sold its land and building and moved into rental space. The company received $1,900,000 for the sale of the land and building. The land and building had an original cost of $350,000 and $950,000, respectively. The undepreciated capital cost (UCC) of the building at October 1, 2018 was $949,000.
8. For the period, the company is eligible to claim CCA of $340,000 on assets in various classes.

Problem 2 - Use of Ratios to Make Other Calculations You have a company that currently has a market capitalization of $4.6 billion It has a market to book ratio of 3 and a book debt to equity ratio of 6. If cash is $1.1 billion, what is the company's enterprise value?

Solution:

Discussion of the Dupont Formula

The Dupont Formula is a way of disaggregating the components of ROE

ROE = Net Margin X Asset Turnover X Equity Multiplier

We know by definition, ROE = Net Income / Book Equity

Dupont shows us:

We also know by definition, ROA = Net Income / Assets

Dupont shows us:

multiple choice

Suppose the company E-bikes R US has an isocost line that crosses the isoquant twice.
To cost minimize, E-bikes R US will
A) use a different isocost line to select the bundle of inputs.
B) use the input bundle associated with the intersection on the higher point of the isoquant.
C) use the input bundle associated with the intersection on the lower point of the isoquant.
D) Both B and C.

Suppose Bob consumes e-bikes and scooters. If Bob’s income and prices of both goods
increase by the same percentage,
A) Bob will buy more of both goods.
B) Bob will buy more of both goods if they are both normal goods.
C) Bob will buy less of both goods if they are both inferior goods.
D) Bob’s utility maximizing bundle stays the same.

A is the CEO of B Ltd. He is quite unhappy as he figured that the profits for the last three years were declining despite increasing sales. He approached you to seek advice on the cost accounting numbers and income statement prepared by his accountant. He supplies you the following information: Particulars 2017 2018 2019 Sales (at $20 per unit) $1,000,000 1,100,000 $1,200,000 Less: Cost of goods sold Opening stock 50,000 200,000 250,000 Add: Cost of production Variable 260,000 240,000 160,000 Fixed (allocated) 390,000 360,000 240,000 Less: Closing stock 200,000 250,000 50,000 Cost of goods sold (before adjusting for production volume variance) 500,000 550,000 600,000 Adjustment for production volume variance (30,000) 0 120,000 Actual Cost of goods sold (after adjustment for production volume variance) 470,000 550,000 720,000 Gross profit 530,000 550,000 480,000 Less: Selling expenses (semi-variable) 490,000 530,000 570,000 Operating profit / (loss) 40,000 20,000 (90,000) Actual production for the last three years was as follows. 2017: 65,000 units, 2018: 60,000 units, and 2019: 40,000 units. The opening stock as of 1st January 2017 was 5,000 units. Fixed manufacturing overheads were allocated to production based on budgeted activity of 60,000 units every year. Actual fixed overheads for each of the three years was $360,000 (per annum). Required: (a) Prepare a marginal costing income statement which would help you understand the performance of Victoria Ltd. (b) Calculate and advise A of the breakeven point for B Ltd. (c) Prepare a numerical reconciliation of the profit numbers that you calculated in requirement (a) and the profit numbers calculated by B Ltd’s accountant. (d) In order to help A better understand the financial affairs of this business, explain the reasons in two brief points about the differences in profit numbers obtained from your marginal costing calculations and the profit numbers calculated by B Ltd’s accountant.

A group of shareholders claimed that the mean tenure for a CEO was at least nine years. A survey of 81 companies found a sample mean tenure of 7.9 years with a standard deviation of 6.4 years. Using the p-value approach, perform the appropriate test at ?=0.10.