Question 1
Sepracor, Inc., a U.S. drug company, reported the following information. The company prepares its financial statements in accordance with U.S. GAAP. 2007 (,000) Current liabilities $ 554,114 Convertible subordinated debt 648,020 Total liabilities 1,228,313 Stockholders' equity 176,413 Net income 58,333 Analysts attempting to compare Sepracor to international drug companies may face a challenge due to differences in accounting for convertible debt under iGAAP. Under IAS 32, ?Financial Instruments,?convertible bonds, at issuance, must be classified separately into their debt and equity components based on estimated fair value. (a) Compute the following ratios for Sepracor, Inc. (Assume that year-end balances approximate annual averages.) 1. Return on assets. 2. Return on stockholders' equity. 3. Debt to assets ratio. (b) Briefly discuss the operating performance and financial position of Sepracor. Industry averages for these ratios in 2007 were: ROA 3.5%; return on equity 16%; and debt to assets 75%. Based on this analysis would you make an investment in the company's 5% convertible bonds? Explain. (c) Assume you want to compare Sepracor to an international company, like Bayer (which prepares its financial statements in accordance with iGAAP). Assuming that the fair value of the equity component of Sepracor's convertible bonds is $150,000, how would you adjust the analysis above to make valid comparisons between Sepracor and Bayer?
Question 2
The Calais Company stresses competition between the heads of its various divisions, and it rewards stellar performance with year-end bonuses that vary between 5% and 10% of division net operating income (before considering the bonus or income taxes). The divisional managers have great discretion in setting production schedules. The Brittany division produces and sells a product for which there is a long-standing demand but which can have marked seasonal and year-to-year fluctuations. On November 30, 20X4, Veronique Giraud, the Brittany division manager, is preparing a production schedule for December. The following data are available for January 1 through November 30 (? is the symbol for euro, the currency for most countries of the European Union): Beginning inventory, January 1, in units 10,000 Sales price, per unit ?400 Total fixed costs incurred for manufacturing ?9,350,000 Total fixed costs: other (not inventoriable) ?9,350,000 Total variable costs for manufacturing ?18,150,000 Total other variable costs (fluctuate with units sold) ?4,000,000 Units produced 110,000 Units sold 100,000 Variances None application rate for start station activity = budgeted total factory overhead at the activity budgeted raw PC boards for the year = $ , , $ . 150 000 125 000 = 1 20 ISBN: 0-536-47129-0 Introduction to Management Accounting: Chapters 1-17, Fourteenth Edition, by Charles T. Horngren, Gary L. Sundem, William O. Stratton, David Burgstahler, and Jeff Schatzberg. Published by Prentice Hall. Copyright ? 2008 by Pearson Education, Inc. 632 Part 4: Product Costing Production in October and November was 10,000 units each month. Practical capacity is 12,000 units per month. Maximum available storage space for inventory is 25,000 units. The sales outlook for December through February is 6,000 units monthly. To retain a core of key employees, monthly production cannot be scheduled at less than 4,000 units without special permission from the president. Inventory is never to be less than 10,000 units. The denominator used for applying fixed factory overhead is regarded as 120,000 units annually. The company uses a standard absorption-costing system. All variances are disposed of at year-end as an adjustment to standard cost of goods sold. 1. Given the restrictions as stated, and assuming that Giraud wants to maximize the company?s net income for 20X4, a. How many units should be scheduled for production in December? b. What net operating income will be reported in 20X4 as a whole, assuming that the implied cost-behavior patterns will continue in December as they did throughout the year to date? Show your computations. c. If December production is scheduled at 4,000 units, what would reported net income be? 2. Assume that standard variable costing is used rather than standard absorption costing. a. What would net income for 20X4 be, assuming that the December production schedule is the one in part a of number 1? b. Assuming that December production was 4,000 units? c. Reconcile the net incomes in this requirement with those in number 1. 3. From the viewpoint of the long-run interests of the company as a whole, what production schedule should the division manager set? Explain fully. Include in your explanation a comparison of the motivating influence of absorption and variable costing in this situation. 4. Assume standard absorption costing. Giraud wants to maximize her after-income-tax performance over the long run. Given the data at the beginning of the problem, assume that income tax rates will be halved in 20X5. Assume also that year-end write-offs of variances are acceptable for income tax purposes. How many units should be scheduled for production in December? Why?
Question 3
Event Planning MPR events are all around us. They can be large, small, formal, or informal and can often include more than one organization. Using the company that you further developed in the Unit 3 Individual Project, plan an event that will be a good fit for it. Part 1: Creating an Event Develop the event. Explain how it aligns with the firm?s mission with a definable target audience. Describe how you will link the image of the firm and the event. Keep in mind that people attend events mainly because of a connection with the theme or topic, not because of the sponsoring organization. Create a presence so that the firm's message and sponsorship will be remembered. Provide a souvenir so that people will remember your event and company. Part 1 of the Individual Project should be 3 pages in length. Part 2: Notifying Connectors Notify connectors before the event. Create a 1-page pitch to the media. Write a 1-page recap of the event with quotes of attendees. Part 2 of the Individual Project should be 2 pages in length. Your assignment should contain a cover page, an abstract page, and a reference page in addition to the body. The body of the paper should be 5 pages, starting with a brief 1-paragraph introduction and ending with a short conclusion. The entire submission will be 8?10 pages in length. Please submit your assignment as a Word document in APA format using the attached TEMPLATE. Notice that the grading criteria components match up with the headings provided in the template. Do not change the font, page breaks, or margins. Using the template without deleting the headings ensures that you cover each segment of the assignment.
Question 4
Preparing production and direct materials budgets see pdf attached Problem 7-6AA Preparing production and direct materials budgets L.O. C3, P3 Black Diamond Slope Company produces snow skis. Each ski requires 2 pounds of carbon fiber. The company's management predicts that 7,000 skis and 10,000 pounds of carbon fiber will be in inventory on June 30 of the current year and that 120,000 skis will be sold during the next (third) quarter. Management wants to end the third quarter with 4,000 skis and 5,000 pounds of carbon fiber in inventory. Carbon fiber can be purchased for $12 per pound. Requirement 1: Prepare the third-quarter production budget for skis. (Amounts in parentheses does not require a minus sign.) BLACK DIAMOND SLOPE COMPANY Production Budget (in units) Third Quarter Budgeted ending inventory (skis) Required units of available production ( ) Units to be manufactured Requirement 2: Prepare the third-quarter direct materials (carbon fiber) budget; include the dollar cost of purchases. (Omit the "$" sign in your response. Amounts in parentheses does not require a minus sign.) BLACK DIAMOND SLOPE COMPANY Direct Materials Budget (in lbs, except where noted) Third Quarter Materials (carbon fiber) needed for production Total materials (carbon fiber) requirements ( ) Units of materials (carbon fiber) to be purchased Materials cost per pound $ Total cost of materials purchases $ Problem 7-6AA Preparing production and direct materials budgets L.O. C3, P3 Black Diamond Slope Company produces snow skis. Each ski requires 2 pounds of carbon fiber. The company's management predicts that 5,000 skis and 6,000 pounds of carbon fiber will be in inventory on June 30 of the current year and that 150,000 skis will be sold during the next (third) quarter. Management wants to end the third quarter with 3,500 skis and 4,000 pounds of carbon fiber in inventory. Carbon fiber can be purchased for $15 per pound. Requirement 1: Prepare the third-quarter production budget for skis. (Amounts in parentheses does not require a minus sign.) BLACK DIAMOND SLOPE COMPANY Production Budget (in units) Third Quarter Budgeted ending inventory (skis) Required units of available production ( ) Units to be manufactured Requirement 2: Prepare the third-quarter direct materials (carbon fiber) budget; include the dollar cost of purchases. (Omit the "$" sign in your response. Amounts in parentheses does not require a minus sign.) BLACK DIAMOND SLOPE COMPANY Direct Materials Budget (in lbs, except where noted) Third Quarter Materials (carbon fiber) needed for production Total materials (carbon fiber) requirements ( ) Units of materials (carbon fiber) to be purchased Materials cost per pound $ Total cost of materials purchases $
Question 5
GETTING YOUR PRODUCT INTO THE HANDS OF CONSUMERS Once you have developed your product/service, you then need to determine how to make it available to the end user. Using your textbook and the articles from the databases in the AIU library, develop a distribution system for the product/service you chose in Week 1. Click here for the research requirements and guide for this assignment. Include the following: 1. An overview of distribution channels (see chapter 10). * Channel Levels - direct versus indirect distribution * Channel Organizations - conventional, vertical, horizontal, and multichannel marketing systems 2. Analyze your target market's needs. Explain what you know about your target market and what they want from a channel of distribution. 3. Determine which channel members you will use and explain why. * Indirect - retailer, wholesaler, dealer, manufacturer's rep, etc. * Direct - catalog, telephone, sales force, etc. 4. Discuss how many channel members you will use and explain why (intensive distribution, exclusive distribution or selective distribution). 5. Recommend a channel organization and explain why (conventional, vertical, horizontal or multichannel marketing system). Your paper MUST include a reference list. All research should be cited in the body of the paper. In-text citations and corresponding references should be included in your paper. For more information on APA, please visit the APA Lab. The paper should be written in third person; this means pronouns like "I", "we", and "you" are not appropriate. The use of direct quotes is strongly discouraged. Your assignment should contain a cover page, an abstract page, and a reference page in addition to the body. The body of the paper should be 3 pages in length starting with a brief one paragraph introduction and ending with a short conclusion. The entire submission will be 6 pages in length.
