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Submitted By siddharth162
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Financial Accounting
MFAB, July 2016

Assignment for Biovail Corporation
Due before 8.30 am, Sunday, July 31, 2016

Please answer the following questions:
1. What is the manufacturer revenue per pill?1 How many pills equate to $10m in revenue? What is the volume of $10m worth of pills? How many truckloads are required to carry $10 million worth of pills? Show your calculations. (5 points)
2. How should the company recognize revenue based on each of the two possible FOB contract structures mentioned in the case? Explain. (4 points)
3. How does the accident affect third-quarter revenue under the two possible FOB contract structures? Explain. (4 points)
4. What should Maris do? (2 points)
Your group’s responses to these questions should be typewritten and about 1-2 pages long
(single-spaced), excluding any tables. Each group should present its own work and not rely on the work of any other group or any previous analyses of the Biovail Corporation Case. In addition, your answers should be based only on information provided in the case.

A clarifying note on terminology:
The case uses the terms “mark-up” and “margin.” Both these terms measure the difference between a product’s price and its cost, but they do it relative to different benchmarks. For “markup,” the price-minus-cost numerator is divided by cost. For “margin,” the price-minus-cost
1

A hint: the cost to the retailer is $2.83 per tablet, i.e., this constitutes the price at which the wholesaler sells each tablet to the retailer.

numerator is divided by price. So, a product with cost of $1 and price of $2 would have a 100% mark-up, but a 50% margin.
You are welcome to leave a soft version of your group case analysis on the canvas website for our course before 8.30 am, Sunday, July 31, 2016.…...

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