...CASE : BILL FRENCH 1. What are the assumptions implicit in Bill French’s determination of his company’s break-even point? Assumptions Sales volume will be maintained. No planned changes in volume next year Only one, aggregate break-even point is utilized in the analysis. Sales mix will remain constant. Linearity will be exhibited by both total revenues and expenses over the relevant range. No capital investments that will increase fixed costs. Constant dividends are paid out to the company’s stockholders. Labor union will not significantly affect cost structure. No substantial changes in product prices. Given Information: Sales at Full Capacity (units) Actual Sales Volume Unit Sales Price Total Sales Revenue Variable Cost per Unit Total Variable Cost Fixed Costs Profit Ratios: Variable cost to sales Unit contribution to sales Utilization of capacity Breakeven Point (Original Sales) Aggregate A 2,000,000 1,500,000 600,000 $7.20 $10.00 10,800,000 6,000,000 4.50 7.50 6,750,000 4,500,000 2,970,000 960,000 1,080,000 540,000 0.625 0.375 75% 0.75 0.25 30% B 400,000 $9.00 3,600,000.000 3.75 1,500,000 1,560,000 540,000 0.42 0.58 20% C 500,000 $2.40 1,200,000 1.50 750,000 450,000 0 0.625 0.375 25% 2. On the basis of French’s revised information, what does next year look like: a. What is the break-even point? Breakeven Point (Reallocated Sales) Aggregate A 2,000,000.000 0.229 1,750,000.000 400,000.000 7.200 10.000 12,600,000.000 4,000,000.000 4.500 8.250 3,690,000.000 640,000.00 2.700...
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...FEU MBA 209 Case Study Jetblue Airways: A Cadre of New Managers Takes Control Case Background JetBlue is a low-cost domestic airline in the United States following a rather interesting combination of ‘low-cost and differentiation’ as its strategy. From its inception in 1998, the airline grew to become the 11th largest player in the airline industry in a short span of 6 years. It had been the only other airline apart from Southwest airlines, to have been profitable during the aftermath of the September 11, 2001 attacks on World Trade Center, and at a time when the entire airline industry was experiencing losses. In 2001, JetBlue planned to launch an IPO to fund its expansion plans. The IPO had to be postponed in light of the terrorist attacks, but JetBlue continued with its expansion plans using its share of the $15 billion bailout ($5 billion in direct compensation and another $10 billion in loan guarantees) the US government granted to the aviation industry, and a fresh infusion of funds from its original investors. Jet Blue is facing the same problem as nearly any company in any industry; that of competition. The most important task at hand for the company of Jet Blue is to maintain the quality of their product so as to ensure that they are able to garner customers, their product being superior to that of their competition. Thus far, Jet Blue has done this quite well, establishing a name for themselves as a low-cost provider of an exemplary air-travel experience...
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...Highway, CSEZ, Angeles City, Pampanga BILL FRENCH CASE ANALYSIS Calamiong, Yna Marie Espejo, Jean Macabuhay, Minorka Salenga, Darlene Samia, Mark Valloyas, Hazel Marie BACKGROUND OF THE STUDY Bill French is a staff accountant at Duo Products Corporation. He has been doing routine types of analytical work and is reporting to his boss, Wes Davidson; a controller of the said company. French was a business school graduate and was considered by his associates to be quite capable and unusually conscientious. It was this latter characteristic that had apparently caused him to “rub some of the working folks the wrong way,” as one of his co-workers put it. French was well aware of his capabilities and took advantage of every opportunity that arose to try to educate those around him. Davidson’s invitation for Bill to attend an informal manager’s meeting had come as a surprise to others in the accounting group. However, when French requested permission to make a presentation of some breakeven data, Davidson agreed. Duo Products had not been making use of this type of analysis in its planning procedures. Basically, what Bill French had done was to determine the level at which the company must operate in order to break even. According to him, the company must be able to at least sell a sufficient volume of goods so that it will cover all the variable costs of producing and selling the goods. In addition to that, according to French, it will not make a profit unless it covers...
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...11 178202 BILL FRENCH, ACCOUNTANT Bill French pegou o telefone e ligou para seu chefe, Wes Davidson, "controller" da Duo-Products Corporation. "Wes, estou pronto para a reunião de hoje a tarde. Elaborei uma série de gráficos de ponto de equilíbrio que irão realmente surpreender o pessoal - e acho que eles também poderão entendê-los". Após conversarem sobre outros assuntos, o telefonema foi concluído e French voltou aos seus gráficos para dar os últimos retoques antes da reunião. French fora contratado há seis meses como contador geral. Ele estava diretamente subordinado a Davidson sendo que, até a época deste caso, estivera envolvido em tipos rotineiros de análises. French era formado em administração, sendo considerado por seus colegas como bastante capaz e extremamente consciencioso. Era esta última característica que aparentemente o levava a ser extremamente severo com seus pares. French tinha plena consciência de suas capacidades aproveitando toda oportunidade que surgisse para tentar ensinar aqueles que o cercavam. O convite de Wes Davidson para French comparecer a uma reunião informal da Diretoria tomou de surpresa alguns do grupo de contabilidade. No entanto, quando French pediu permissão para apresentar as conclusões de sua análise, utilizando gráficos de pontos de equilíbrio, Davidson concordou. A Duo-Products Corporation nunca havia utilizado este tipo de análise em suas revisões ou programas de planejamento. Basicamente, o que French havia feito fora determinar...
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...Millennium development goals and how Kenya has achieved it Millennium development goals are similar to vision 2030, how Kenya took it upon them to make some changes that would lead to development of the country. The development plan that was launched by President Kibaki on 10th June, 2008 was put in place to transform national development. The vision is a national plan to make Kenya as wealthy as the rising stars of the Far East like Singapore, Thailand and Malaysia. It targets an annual growth rate of 10percent. The plan to get to Kenya to be a middle income economy and rapidly industrializing country with a high quality is life. The development plan was to work in phases. i.e.: The first stage of 5 years to 2012 being based on a Medium Term Plan (MTP) which started in the year 2006. Under the plan, the government is to focus on the incorporating two elements focusing on the recovery from effects of the post-election crisis. Intervention areas include security, peace-building and reconciliation, resettlement of internally displaced persons, revitalization of productive sectors including agriculture, tourism and business and restoration of damaged infrastructure. The next 22years from 2006 would then be a period of expanding the economy and political and social space whereby the country will have attained a middle-level economic status. All Kenyans, me included hope to see the country gaining a middle income status and providing a higher quality of all for all citizens. This though...
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...In 2010, 335 out of 557 members of the French National Assembly voted to approve a bill that would ban the wearing of a traditional Islamic full veil in public. One member voted against the bill, and the other 221 members abstained from voting, so when the bill went to the Senate for a final vote, they already had a seemingly good grasp on the support level they would get if the law were passed. On April 9, 2011, however, a group of 61 protestors against the law had to be taken away in police vans and detained. While the majority of the French population is not affected by this law, a small group of Muslim women (and a pool of potential tourist) are. In 2009, French President, Nicholas Sarkozy made a statement claiming that religious face veils were “not welcome” in France because they goes against the country’s secular values ("French Senate Bans Burqa: Bill awaits President Nicholas Sarkozy’s signature" September 14, 2010). This essentially sparked the discussion and consideration of a banning on religious face veils, namely traditional Muslim burqas and niqabs. The rationale behind the banning is that it not only goes against the countries secular values of equality and dignity, but it also “imprisons women” and causes a safety issue for the citizens of the country (Ristici April 11, 2011). While freedom of religion and religious expression is practiced in France, the law under which the ban exists was passed with the reasoning that it made the nation’s citizen to feel threatened...
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...Managerial Economics MBA 204 030 BILL FRENCH, ACCOUNTANT Bill French picked up the phone and called his boss, Wes Davidson, controller of Duo- Products Corporation. “Say, Wes, I’m all set for the meeting this afternoon. I’ve put together a set of break –even statement that should really make the boys sit up and take notice- and I think they’ll be able to understand them, too.” After a brief conversation about other matters, the call was concluded and French turned to his charts for one last check-out before the meeting. French had been hired six months earlier as a staff accountant. He was directly responsible to Davidson and, up to the time of this case, had been doing routine types of analysis work. French was an alumnus of a liberal arts undergraduate school and graduate business school, and was considered by his associates to be quite capable and unusually conscientious. It was this latter characteristic that had apparently caused him to “rub some of the working guys the wrong way,” as one of his co-workers put it. French was well aware of his capabilities and took advantage of every opportunity that arose to try to educate those around him. Wes Davidson invitation to French to attend an informal manager’s meeting had come as some surprise to others in the accounting group. However, when French requested permission to make a presentation of some break –even data, Davidson acquiesced. The Duo-Products Corporation had not been making use of this...
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...SAMPLE CASE STUDIES – International Business Case Study 1 - Documentary Credit M/S Auto India Introduction M/S Auto India is a public limited company; they manufacture SUVs (sports utility vehicle), in technical collaboration with General Motors of USA. The company has established their manufacturing base at Ranjangaon in Pune. They have acquired an area of 250 acres and the total project cost is estimated at Rs 1500 crores. As per the projections, the company is slated to achieve a 25% market share in the Indian market, within a period of two years. Out of the total project cost, 49% is brought in by General Motors and the rest is tied up with financial institutions, international banks and Indian banks. The working capital is financed by a consortium of banks in which Global bank, Pune branch, is the leader. The company imports many parts of the car engine in a CKD (completely knocked down) condition from General Motors, Detroit, after establishing import letters of credit through its main bankers, Global Bank, Pune Branch. M/S Auto India approached Global Bank, Pune for opening of import letter of credit as per UCP ICC 600 for USD 100,000, on sight basis, in favour of General Motors, Detroit. Type of credit Application Applicant Beneficiary Issuing Bank Advising Bank Negotiating Bank Reimbursing Bank Availability Expiry Amount Merchandise Quantity and price - Irrevocable negotiable - UCP ICC 600 - M/S Auto India, Pune, India - M/S General Motors, Detroit, USA - Global Bank...
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...SAMPLE CASE STUDIES – International Business Case Study 1 - Documentary Credit M/S Auto India Introduction M/S Auto India is a public limited company; they manufacture SUVs (sports utility vehicle), in technical collaboration with General Motors of USA. The company has established their manufacturing base at Ranjangaon in Pune. They have acquired an area of 250 acres and the total project cost is estimated at Rs 1500 crores. As per the projections, the company is slated to achieve a 25% market share in the Indian market, within a period of two years. Out of the total project cost, 49% is brought in by General Motors and the rest is tied up with financial institutions, international banks and Indian banks. The working capital is financed by a consortium of banks in which Global bank, Pune branch, is the leader. The company imports many parts of the car engine in a CKD (completely knocked down) condition from General Motors, Detroit, after establishing import letters of credit through its main bankers, Global Bank, Pune Branch. M/S Auto India approached Global Bank, Pune for opening of import letter of credit as per UCP ICC 600 for USD 100,000, on sight basis, in favour of General Motors, Detroit. Type of credit Application Applicant Beneficiary Issuing Bank Advising Bank Negotiating Bank Reimbursing Bank Availability Expiry Amount Merchandise Quantity and price - Irrevocable negotiable - UCP ICC 600 - M/S Auto India, Pune, India - M/S General Motors, Detroit, USA - Global Bank...
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...CASE 1: 1) Global Bank, Pune was incorrect in its interpretation of UCP 600 article 14. The credit clearly stated that it expired at the counters of the negotiating bank and that the documents were to be sent to the head office of Global Bank. The credit did not contain any indication that presentation at the counters of Global Bank’s head office was for administrative purposes only, and that effective presentation to the issuing bank would only be considered when the issuing bank had received the required documents. UCP 600 article 6 states that presentation of documents must be made to issuing bank, or the confirming bank, if any, or any other nominated bank. The beneficiary presented the documents to the nominated negotiating bank and American Bank, New York presented the documents to the issuing bank as instructed. Therefore, Global bank’s Pune Branch had a duty to determine the number of days remaining in the five banking day period after presentation of the documents at their head office in order to comply with article 14 of UCP 600. 2) Yes, the stand taken by American Bank, New York, as the negotiating bank, is correct. As per the terms and conditions of the credit, they have negotiated the documents and forwarded the same to Global Bank’s head office. The American bank, New York should have received the notice of rejection of the documents within five banking days following the day of receipt of the documents at the counters of the head office of...
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...Case Study 1 - Documentary Credit M/S Auto India Introduction M/S Auto India is a public limited company; they manufacture SUVs (sports utility Vehicle), in technical collaboration with General Motors of USA. The company has established their manufacturing base at Ranjangaon in Pune. They have acquired an area of 250 acres and the total project cost is estimated at Rs 1500 crores. As per the projections, the company is slated to achieve a 25% market share in the Indian market, within a period of two years. Out of the total project cost, 49% is brought in by General Motors and the rest is tied up with financial institutions, international banks and Indian banks. The working capital is financed by a consortium of banks in which Global bank, Pune branch, is the leader. The company imports many parts of the car engine in a CKD (completely knocked down) condition from General Motors, Detroit, after establishing import letters of credit through its main bankers, Global Bank, Pune Branch. M/S Auto India approached Global Bank, Pune for opening of import letter of credit as per UCP ICC 600 for USD 100,000, on sight basis, in favour of General Motors, Detroit. Type of credit - Irrevocable negotiable Application - UCP ICC 600 Applicant - M/S Auto India, Pune, India Beneficiary - M/S General Motors, Detroit, USA. Issuing Bank - Global Bank, Pune, India Advising Bank - The American Bank, New York Negotiating Bank - The American Bank, New York Reimbursing Bank - International Bank, New York...
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...Case Study Analysis : Bill French Based on Break Even Point INTRODUCTION * Bill French was a Staff Accountant in Duo-Products Group. * He used to report directly to his boss, Wes Davidson(Comptroller). * He wanted to do use Break-even analysis for the planning procedures, which was first of its kind for the Duo-Products Group. * Basically what French had done was to determine the level at which the company must operate in order to break even. * As he put it, 1. The company must be able at least to sell a sufficient volume of goods so that it will cover all the variable costs of producing and selling the goods. 2. Further, it will not make a profit unless it covers the fixed costs as well. 3. The level of operation at which total costs are just covered is the break-even volume. 4. This should be the lower limit in the planning. ACCOUNTING RECORDS * The accounting records had provided the following information that French used in constructing his chart: 1. Plant Capacity -2 million units per year. 2. Past year’s level of operations - 1.5 million units. 3. Average unit selling price - $7.20. 4. Total fixed costs - $2,970,000. 5. Average unit variable costs - $4.50. * From the above information, French observed that 1. Each unit contributed $2.70 to fixed costs after covering its variable costs. 2. For break even, unit sold must be 1,100,000. 3. As variable costs per unit is 62.5% of the...
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...Strategic cost analysis & management: Case Study Bill French Accountant Takeaways Bill French, aggregated BEP basic Sales volume Unit sales price (+) Sales revenue Unit var. cost (-) Total VC (=) Contribution margin (-) Fixed cost (=) Operating profit (-) Taxes (=) Net Profit after taxes Dividends (=) Net Profit 1 076 406 1,159 1 247 400 0,56 607 401 640 000 640 000 0 0 0 0 0 basic+ dividend 1 328 688 1,159 1 539 760 0,56 749 760 790 000 640 000 150 000 75 000 75 000 75 000 0 basic+ union 1 189 275 1,159 1 378 200 0,62 738 200 640 000 640 000 0 0 0 0 0 + dividend + union 1 470 093 1,159 1 701 216 0,62 911 216 790 000 640 000 150 000 75 000 75 000 75 000 0 Bill French, line-by-line BEP basic Sales volume at aggregated BEP 1 076 406 basic+ union 1 189 275 BEP A (in units) BEP B (in units) BEP C (in units) 170 000/0,42= 404 762 275 000/0,88 = 314 286 195 000/0,55 = 354 545 170 000/0,30 = 576 271 275 000 / 0,81 = 338 462 195 000/0,53 = 371 429 Bill French, aggregated CVP calculations basic Sales volume Unit sales price (+) Sales revenue Unit var. cost (-) Total VC (=) Contribution margin (-) Fixed cost (=) Operating profit (-) Taxes (=) Net Profit after taxes Dividends (=) Net Profit 1 160 500 1,159 1 344 854 0,56 654 854 690 000 640 000 50 000 25 000 25 000 0 25 000 + dividend 1 412 783 1,159 1 637 214 0,56 797 213 840 000 640 000 200 000 100 000 100 000 75 000 25 000 + union 1 282 188 1,159 1 485 873 0,62 795 872 690 000 640 000 50 000 25 000 25 000 0 25 000...
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...Judicial Review is the power that the Supreme Court has to review all Bills and Acts for constitutionality and the Supreme Court’s power to void Bills and Acts by declaring that Bill or Act unconstitutional. The power of Judicial Review brought a Judicial Branch check against the Executive and Legislative Branches in use and added stability to the internal government. With rising European conflicts and the attacking of all foreign trade into Britain and France, Jefferson ordered Congress to pass an Embargo Act to protect the United States from the escalating European War. United States trade was being devastated by the war and to prevent further harm to United States trade an Embargo of all foreign states was passed. The Embargo Act was both stabilizing for the north and destabilizing for the south. The northern industries had an economic boom during the Embargo, leading to the stabilization of the northern economy, and the future use of the Lowell factory system and the birth of the Market Revolution. On the other hand, the south faced economic destabilization having no industries and having price increases on all manufactured...
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...economically and civilly. Cuba has struggled due to the government control over everything. In France, the president serves as the Head of State, the Head of Executive, and the Supreme Commander of Military. After being elected through popular vote from the people (18 years or older), the president then elects a prime minister, who then suggests the Council of Ministers for the president to appoint. The president makes the decisions for his country and enforces the laws with the aid of the prime minister and his Council of Ministers. Together they form the executive branch. The cabinet meets weekly with the president presiding to determine and apply policy through decrees, and to put new legislation before Parliamentary in the form of bills. In Cuba, however, the executive branch is made up of the president (who also serves as the Chief of State and the Head of Government), the Council of State, and the Council of Ministers (the Cabinet). The President of the Council of State proposes a Council of Ministers (seven vice presidents of the Council of State, Secretary of Executive Committee, and Heads of National Ministries) for the National Assembly to appoint. The President, Vice President, and Council of State are also elected by the National Assembly. France allows the people of its country the privilege of voting on whom their representative leaders should be, unlike...
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