John Proctor †the fair and noble character Essay

The novel The Crucible by Arthur Miller is about witchcraft and the accusations of witches in Salem, Massachusetts. One of the main characters in the story, which happens in the spring of 1692, is John Proctor, a farmer in his middle thirties. He is married to Elizabeth Proctor. It is not directly said, but they have at least two sons and a servant named Marry Warren. Because Proctor seems to be very religious, he really loves his wife and he confesses his affair with Abigail Williams to Elizabeth; furthermore he later refuses to be with Abigail, this makes him a very fair man. First of all, the protagonist John Proctor seems to be religious, in view of the fact that when he is taken to jail he does not defend himself at all; he simply accepts that he did something wrong and he can live with that. This makes him religious, because he does not want to harm the Ten Commandments. He writes a confession that he has seen the devil and that he was the only one. He even signs this paper, but as soon as Deputy Governor Danforth asks Proctor to give the confession to him, Elizabeth’s husband refuses and tears it up. On the one hand he does that, because he thinks that his name cannot be taken away from him; on the other hand he knows that the paper does not tell the truth. He rather wants to be hanged than to live with the thought that he has lied to the church. This is a very strong and self-confident consideration. Another proof that John Proctor is fair can be seen in his former affair with Abigail Williams, the servant to the Perris-household. She was once in love with him, but they broke up because Proctor realized that he really could not afford to be in love with a girl while being married and having children; this makes him being fair to his wife as he does not want to hurt  her. Later when Abigail threatened to tell Elizabeth about their affair he wisely chose to tell the truth to his wife. He refused not to tell her earlier, because he did not want to hurt her. It is discovered in the last act that their relationship is so strong that she forgives him. Telling her about his affair so late is probably not the best solution, but it is certainly better than saying nothing, so that Elizabeth finds our on her own. A further indication that John Proctor is fair would be that he remains strictly faithful to his wife once he realized that having affairs while being in love with someone else is a bad conception. So when Abigail later comes to Proctor to ask him for continuing their relationship the protagonist refuses. He cannot do this to himself or to his wife. Otherwise he would commit adultery once more. Again, this makes him being fair to his wife. In conclusion one can say that the character John Proctor is a quite fair person. After he realizes some things–for example, having an affair is not the best while being married–he tries to do the best for himself and the people around him. This includes no voluntarily contact with Abigail. They only talk when he tells her that he cannot or does not want her anymore. Finally he pays with his life for committing adultery. This action is one of the most expressive acts in the whole play. John Proctor is a good and noble man and because of this he believes that he can’t be hanged and die a martyr when he has this sin blooming over him every waking moment.

Fiscal Policy Paper Essay

The United States has been known as a powerhouse throughout the world and as having a good reputation with other countries. With the deficit, surplus and a high debt has caused the United States to lose some of its stature on an international level. The national debt has three parts concerning fiscal policies, prevailing economic conditions, public policy, and demographic changes. The United States has had annual deficits spending a lot more than the Department of Treasury has collected. This has occurred almost every year since the nation has been around. This is what has established the United States as a preeminent global power that it is right now. (â€Å"Financial Regulations†, 2012). If the deficit and debts continue in a downward spiral this will have an effect on the strength and status of the United States bargaining power. While the United States could faces inflation, on the international level it could cause the American dollar to depreciate and this would harm the United Stated international competitive power. If this happens the reputation of the United States would diminish on an international level as well. When the United State is importing goods, an Italian clothing company can reap the benefits. If Italy’s economy is strong enough when the United States runs a trade deficit, an Italian clothing company will continue to grow and produce jobs for the people in Italy. It is opposite if the United States runs a trade surplus, this can cause an Italian clothing company to shut down because the company will not be producing the goods that the United States need. When there is a debt in the United States and a demand for Italian clothing company to import their products, the United States must sell off assets at a lower value to cover the demand of the products. (According to â€Å"Research and Data† 2011). If the United States does not have any assets to sell they will have to borrow the product from the company and pay them back at a later time. This will make their debt larger because they will have to pay back the debt plus interest on the total price. Today the unemployme nt rate is a serious problem in parts of our country. People who are unemployed are not paying taxes. Unemployment is a huge part of the deficit. A large amount of people go from employed to unemployment at a fast rate. People are losing their jobs for many  reasons which push them to the unemployment line. Unemployment benefits are designed to help people until they can find employment. When jobs are lost, salaries stop, taxes are not being paid, and the government is paying out unemployment benefits to people who are not working. There has to be some kind of solutions to help curve the unemployment problems. Creating training programs for high demand positions should be offered to unemployed clients to get them back to work. Most students rely on Student loans, Pell grants and any assistance they can get from the government to help them further their education. In February, there was a threatened sequester and education funds were affected. Education was one of the areas that was in the line of fire and was talks of cuts ensued. This would hurt many students because it would decide if they would be able to continue attending school. It would also hurt the universities because some had already experienced cuts within the system. President Obama spoke about funding for education and how important it is to continue. To keep the Pell Grants safe, other areas were targeted. The Leap grants, subsidized loans, Trio program, and Perkins loan were all at risk. It all comes down to the economy. Money has to be moved ar ound and often causes problem for many. In the end students will see interest rates on loans rising and higher payment to repay after graduation. Taxpayers suffer from the debt and deficit because taxes are raised to offset the deficit and debt. If the debt is high concerns on how the debt is going to get paid grows. The debt is what owed by the federal government. Since the government continues to borrow funds from the Social Security Trust Fund, future Social Security is in jeopardy. It’s predicted that over the next 20 years the social security fund will not have enough to cover the benefits of the baby boomers that will be ready to retire. These benefits will have to be paid so taxes will have to be raised and other government programs will have to be cut. With the future predication of more social security recipients it leaves fewer workers to pay into the system. Future social security and Medicare users depend on the surplus to fund their benefits. For years Social security had a huge surplus because it collected more in taxes than what was paid out. Beginning in 2010 Social Security started paying out more in benefits causing a need for concern. Raising taxes is one way to increase the social security fund. It is highly unlikely that Social Security and  Medicare will be cut because both are funded by employees, employers and t hose self-employed (taxpayers), As long as people are working and paying taxes Medicare and Social Security will always have funding. It’s important to understand that a considerable part of the loss in U.S. manufacturing jobs has not just been a story of higher productivity leading to fewer jobs—as was the case with the transformation of the U.S. agricultural sector over the last century. It’s been more a story of decline in output due to a loss of international competitiveness. This is why the decline of U.S. manufacturing merits a serious policy response. Look at Detroit for example the decline of car industry and factory jobs have been in constant decline because of the way this country sends jobs to other countries for cheaper labor. So in essence why would a foreign country buy cars from the U.S. when they know what it cost to make them? And more than likely we are in debt to them which would in part make us sell cheaper than what we want just because of it. The debt affects the deficit in three ways. First, the debt actually gives a better indication of the true deficit each year. You can more accurately gauge the deficit by comparing each year’s debt to last year’s debt. That is because the budget deficit, as reported in each year’s budget, does not include the amount owed to the Social Security Fund. However, this is a debt that will need to be repaid one day, and so the amount borrowed from it is a more accurate description of each year’s government liabilities than the reported budget deficit. As one can imagine economic production and growth and what GDP represents, has a large impact on nearly everyone within that economy. For example, when the economy is healthy, you will typically see low unemployment and wage increases as businesses demand labor to meet the growing economy. A significant change in GDP, whether up or down, usually has a significant effect on the stock market. It’s not hard to understand why a bad economy usually means lower profits for companies, which in turn means lower stock prices. Investors really worry about negative GDP growth, which is one of the factors economists use to determine whether an economy is in a recession. ? References St. Louise Federal Reserve, Deficit, Debts and Trust Funds, August 2006) http://www.investopedia.com/articles/ useconomy.about.com Fiscal Policy Financial Regulations. (2012). Retrieved from http://www.cfr.org research and data. (2011). Retrieved from http://www.phil.frb.org Colander, D. C. (2010). Macroeconomics (8th ed.). Boston, MA: McGraw-Hill/Irwin.

Why do people criticize types of music like metal

Since that decade heavy metal was divided in many branches where they born different types of heavy metal as: Nu metal, dark metal, doom metal, metal core, rock metal, alternative metal, death metal, Christian metal, trash metal, etc then they generalized heavy metal as metal, and heavy metal started making part of metal. So this music stared to be a door for the teenagers that wants to highlight from others that's why the majority of metal heads have piercing and tattoos. Society didn't accept them and judging from their appearance the stereotype metal as† satanic†.The people that don't listen to metal because just didn't like this genre just prefer to don't comment and keep distance. But metal is strongly criticized by society and there are people that said that metal is only an excuse to use drugs and alcohol, because in all the genres metal is the one that has the most drug addict followers. Others said Metal Heads are dark and satanic as the famous singer Justine bib ber that said:† I reject metal. Why? Because is an insipid, violent and dark music that incite teenagers to follow the path of the sin and to lock n a melodramatic and melancholic way of life without sense. Metal constantly resave critics by another famous genre called regulate, with comments as: â€Å"those teenagers are violent they express their self in a bad way and live their live like a punish, like something bad. † â€Å"Regulate wants to contagious world with happiness and Metal Heads just try to cloud happiness with their gloomy and sad thoughts. † â€Å"metal is not music there are just screams without harmony. † As metal is a different type of music that express rebellion and rudeness, metal is present to the ones who didn't know about his genre as bad music, also people get scare about the content of the lyrics.Many religious people or Scientific' use phrases like:†all metal is satanic. † ‘the members of that band love Satan. † ‘the lyrics of that song backward and translated in an old Portuguese language is part of a indigenous ritual to call Satan spirit. † These arguments aren't valid and aren't proven. One thing is for certain, that there are satanic bands but these are very few, and are part of one of the branches call death metal or black metal, this branch is for satanic ands only, and this one's didn't have hide their intentions. Metal change personality' no, people look them different because they present a different attitude, Metal Heads didn't fallow modes they just are unite because of the feeling of the music. All this disturbance is because the hypocrisy of the society that talk about values but they didn't practice, Metal Heads show their self as they are, they do not hide their likes or feelings, that's why the rude lyrics an strong sounds.Play metal is not easy the complexion of the music is ere low as Metallic, system of a down, avenged sevenfold or AC/dc, and people c riticized them for them is very sad that all their effort is not considerate. As James Hatfield the first voice o the famous group Metallic that said â€Å"Honestly, all my years of carrier have been disqualified by inexperienced people that move masses in a way I don't like. † Boring in mind the both sides of the coin, there is a very interesting opinion. â€Å"All the likes and dislikes have to be respected, but when someone criticized metal has to have arguments to catalog metal as satanic.

Diverse Practices in Business Culture Essay Example | Topics and Well Written Essays - 250 words

Diverse Practices in Business Culture - Essay Example The criterion to use diverse practices is successful only when a firm is able to ascertain in what context they would be beneficial for them. The cross-cultural training has been given to students so they can understand the differences among cultures and hence, can adapt global business practices acceptable for all. Hofstede’s framework of cultural dimensions in a workplace has been considered an adequate system to ascertain, what kind of diverse practices would work in a specific region and how can a foreign company can sustain in a different culture without conflicting with their diverse cultural values. Hence, modernization and convergence have already affected the diversity of different cultures, with the domination of western capitalists the culture at the workplace is considered as a universal culture. Nevertheless, one needs to learn in what amount diversity would be acceptable in conflict with the national culture. Since national culture directly influences job performance, therefore, its effects can increase and decrease according to the nature of the job. Consequently, cultural norms if taken into consideration while formulating workplace norms results in fruitful outcomes. Afterwards, diversity does not become a cause of emotional turmoil instead it becomes acceptable even in diverse cultures without resistance.

Packaging for Export 342 wk 7 forum Essay Example | Topics and Well Written Essays - 250 words

Packaging for Export 342 wk 7 forum - Essay Example The result of this control has landed Pantos the 4th and 16th places in global sea and air forwarding respectively (Pantos Indonesia, 2012). Pantos has a total warehouse space of 550,000 square meters (Pantos Indonesia, 2012). In June 1997, Pantos Asia was established in Indonesia (Akiva,‎ Meersman, & Voorde, 2013). For 15 years since its establishment in Asia, Pantos Asia has expanded its business through Asia to include India, Thailand, Singapore, Malaysia, Vietnam, Cambodia, and the Philippines (Surhone, Tennoe, & Henssonow, 2010). As of the most recent analysis of the company carried out in 2012, Pantos Asia had 16 offices, 9 warehouses, in 9 countries around Asia Pacific region (Akiva, ‎ Meersman, & Voorde, 2013). It is documented that since its founding, Pantos Asia has grown to 335% of its total warehouse size (Surhone, Tennoe, & Henssonow, 2010). It is currently covering 105,700 square meters in warehouse space. Freight forwarding has increased by 140% within the same period of 15 years (Surhone, Tennoe, & Henssonow, 2010). The company offers several services designed to meet customer demand. These include Pantos freight forwarding which includes sea, railroad, and air; Pantos warehousing offers a variety of services that ensure shipments are handled with care and accommodates all types of consumer goods (Akiva,‎ Meersman, & Voorde, 2013); and Pantos Express that offers direct delivery service (Pantos Indonesia, 2012). The company also is involved in the movement of large scale and dangerous cargo. For instance, the company records that â€Å"the 190 ton gas turbine power generator shipment from Frankfurt was the biggest in world transportation history (Pantos Indonesia, 2012)†. The company aims at carrying 5 million ton TEUs and 1.2 million tons in air freight to become the world’s logistics partner (Pantos Indonesia,

The Weary Blues and The Negro Speakers of Rivers by Langston Hughes Essay

The Weary Blues and The Negro Speakers of Rivers by Langston Hughes - Essay Example The narrator is occupied with the sadness of the notes and tones of the blues music. The narrator feels as if the piano is moaning (lines 10, 18), which shows the extent of sadness that is being depicted from the musician’s state of mind and his selection of the blues song. The song is about how the musician is going to survive and be happy instead of all the miseries, sadness, and worries he possesses, like when he sings, â€Å"I's gwine to quit ma frownin'/ And put ma troubles on the shelf† (lines 21-22). But all of a sudden, he again becomes depressed, and says that his anguish is going to be so stressful that he wishes he could die, like he says, â€Å"I got the Weary Blues/ And I can't be satisfied./ Got the Weary Blues/ And can't be satisfied--/ I ain't happy no mo'/ And I wish that I had died† (lines 25-30). This change of mood tells that he is not being very effective in putting off his worries, despite all his efforts to stay happy. He keeps on playing t ill late night; and, when he goes to bed, he dreams of himself as a rock with no emotions or a dead man. The musician is a Negro in the poem. And he is sad. This refers to the poet himself, because Hughes was an African-American, and was also a victim of racism. Hence, the poem talks about his own gloom and shattered state of mind, because he has to go through emotional turmoil due to his race. â€Å"The Negro Speaks of Rivers† Langston Hughes, being an African-American poet, suffered from racial discrimination in the early twentieth century in America. However, he tried to survive the currents of racism, and struggled to spread the message of love and equality through his poetry. This poem speaks about the unity of people through the imagery of river. The poem starts with the poet mentioning that he has known rivers since ages. Starting lines, â€Å"I've known rivers/ I've known rivers ancient as the world and older than the flow of human blood in human veins†, hold t he imagery of river, which the poet uses to show the connection of all human life on earth. He mentions Euphrates, Congo, Nile, and Mississippi, which shows that he is talking about life from the beginning of civilization till the American Civil War. Euphrates shows the origin of civilization â€Å"when the dawns were young†. He claims to be united with the whites living near the Congo, when he says that he built his hut â€Å"near the Congo†. The white race also served as slaves of the Egyptians who built the pyramids, and the poet mentions his looking at the Nile and raising the pyramids, trying to associate himself with the whites. His mentioning of Mississippi and Abe Lincoln going down the New Orleans reminds us the setting free of the slaves, with the Mississippi river symbolizing human blood belonging to all races. The poet repeats that, â€Å"My soul has grown deep like the rivers†, which means that he has identified his true identity, because one who be comes familiar with his soul recognizes who he actually is. Since, the river symbolizes human life in this poem, and its flow symbolizes the flow of blood in the veins of all humans, this refers to the fact that all humans are linked to each other, since all of them have the same blood in their veins, because they have the same father, Adam, and the same mother, Eve. Hence, the poet has tried to link himself with all races on the

Manborg film critical review Essay Example | Topics and Well Written Essays - 500 words

Manborg film critical review - Essay Example Apart from this, the movie was also found to have a plot that was outdated and too far-fetched. This paper shall look at certain aspects of this movie that shape its ideological viewpoints and the audience that it was aimed at. The movie talks of the return of the Nazis who reigned over Germany during the era between the two world wars and during the Second World War. The movie depicts a demonic version of this set of people and the only way out for the people of the world is in the efforts of a man who is also partially a robot. The rise of this man from an ordinary foot-soldier to a manborg, or a being who is part-human and part-machine is something that is not completely explained in the movie. The rise of this man is not something that does not need to be problematized. The resistance of the world to the problems that affect the whole of humanity is located in Euro-America. This is to say that the hero and the messiah fall within certain frameworks of eurocentricity. The inabilit y of the movie to move beyond this is also seen in the conventional nature of the villains.

Medecine Essay Example | Topics and Well Written Essays - 1250 words

Medecine - Essay Example Every disease has a cause, although the causes of some remain to be discovered. Every disease also displays a cycle of onset, or beginning, course, or time span of affliction, and end, when it disappears or it partially disables or kills its victim. An epidemic disease is one that strikes much person in a community. When it strikes the same region year after year it is an endemic disease. An acute disease has a quick onset and runs a short course, an acute heart attack, for example, often hits without warning and can be quickly fatal. A chronic disease has a slow onset and runs a sometimes years-long course. The gradual onset and long course of rheumatic fever makes it a chronic ailment. Moderate exercise is necessary to health, but athletes who do vigorous exercises have not been noted for longevity. Fresh air is stimulating, but, where actual breathing is concerned, it's no better than the air in most rooms. General quality of air affected by pollution is indeed a concern. A balanced diet containing correct amounts of the basic food substances is essential, but there is no evidence that when or at what intervals one eats makes the slightest differences -unless one is a sufferer of stomach ulcer, in which case the interval between meals should be narrowed down. The concept of having meals at fixed intervals is nothing but a social convention and in a modern life obviously a matter of convenience. Sleep, too, is a necessity. But different people require vastly different amounts of sleep. In a number of studies of men and women who lived to a ripe old age it was found that the commonality they had was balanced diet of healthy food, contented minds, their interest in something which gave them a focus in life and partly their heredity. Health is defined as a state of complete physical, mental and social well- being and not merely the absence of diseases or infirmity. The main rules of health are- (a) Do not abuse your body -i.e., exercise, it, feed it sensibly and in moderation and don't poison it with cigarette smoke (your's or anyone else's), with alcohol or with other drugs (b) Think positively about health-make it a purpose for living (c) Turn your thoughts away from those bodily functions (digestion, circulation, breathing and so on), which can look after themselves. Introspection leads to hypochondriasis, and Social Medicine Medicine has come a long way from the time when disease was considered as punishment from the gods to a time where the society is looked on as the patient (society being responsible for them). Its treatment requires lot of tenderness and care. The field of medicine became more and more truly scientific, and the 20th century saw the-most rapid advances ever known, marked by the discovery of germs by Pasteur, of antiseptics by Lister, of vaccination by Jenner and anaesthetics by well sand Scot Simpson, the use of the microscope by Vuirchoe (German) brought great advance in the understanding of diseases and Ehrlich (German) conceived the brilliant idea of 'magic bullet' -drugs aimed at the real cause of the disease which would attack the germs at the root of the disease without hurting the patient. Edwin Chadwick, one of the greatest names, revolutionised the social control concept by so dealing with the causes of disease (like proving safe drinking water, controlling pests, lice, files , mosquito, etc.) that they were prevented form arising at all. A population riddled with

Sustainable Management Futures Essay Example | Topics and Well Written Essays - 2250 words - 1

Sustainable Management Futures - Essay Example It is normally because of a risk or illegality, which arms others The employee has received no satisfactory reason from their immediate supervisors and he has exhausted all the channels available within the company, including going to the board of directors (GJALT & JOB, 2008). The employee has documented evidence that would convince a reasonable, impartial observer and that his or her concern for public safety is correct and the company product or action is likely to cause serious and considerable public harm (GJALT & JOB, 2008). Loyalty according to similes dictionary is the act of binding yourself intellectually or emotionally to a course of action while integrity is the quality of always behaving according to the moral principles that you believe in so that people respect and trust you or behaving according to the rules and standards of your job (ROSS, 2008). Loyalty to clients or to one’s own integrity versus loyalty to the organization, the general public, professional standards, and family and friends may prove to conflict and bring tension between the need to prevent abuses and preserve trust of an individual. Trust is a vital tension point in whistle blowing and a key source of ambiguity (ROSS, 2008). However, at times, loyalty to peers and the organization can be blind or misplace, and thus ceases to be a virtue because harm, rather than good can come from it. The Public Disclosure Act 1998 is an Act of the Parliament of the United Kingdom that protects whistleblowers from detrimental treatment by their employer (HOBBY, 2010). Influenced by various financial scandals and accidents, along with the report of the Committee on Standards in Public Life, the bill was introduced to Parliament by Richard Shepherd and given government support, on the condition that it become an amendment to the Employment Rights Act 1996 (HOBBY, 2010). After receiving the Royal Assent on

Accounting analysis assess. Write about the degree to which the firm's Assignment

Accounting analysis assess. Write about the degree to which the firm's accounting reflects the underlying business reality - Assignment Example The revenues of the Myer Holdings have been increasing steadily since 2010 unto 2012 when the income earnings after tax stabilize. Income after tax rises by a small percentage but later starts to decline steadily in the year 2014. The net profit after tax was increasing positively over the few years but still lower compared to David Jones, the company’s chief competitor. This is noted in the year 2014 when the company sales have reduced. For instance, the entity has an experienced underinvestment recently thus lowering the EBIT in the year 2014. The recent developments are expected to raise the company revenues from $ 2891.7 million in 2014 to3.324.4 million by 2020 (Appendix 4). The selling expenses in the year 2014 will increase from the 783800 to 811718. In the same year, the expenses increased while the sales decreased thereby lowering the EBIT (Appendix 6). The sales income is currently above $ 2 billion and capitalization of the market of above $ 2 billion (Appendix 4). The reporting standard by the company fails to reflect the true business value. Also, the used report describes the firm’s performance and creation of value on the basis of the 2013 report. (Appendix 4) Over the last two years market price of Myer has reduced from 21.8 to 16.8 thereby diluting the share earnings (Appendix 4). This portrays a negative performance of the company in the last year. The company has also diversified its investments. It has sourced goods and speeded the importation directly. The firm analyzed favors different individuals increasing the share of the market to the different customer. The savings and investments of the company increased steadily over the three years from 2010 but declined in the year 2014. (Appendix 6) To start with, the firm is dealing with products that comprise of clothing, hardware, cosmetics, general merchandise among others. Currently, the firm is operating 67 stores that produce 11 ranges of

Portfolio management Research Paper Example | Topics and Well Written Essays - 1500 words - 1

Portfolio management - Research Paper Example Aim of this work will be then to analyze into details the success factors of this nation on an economic basis, together with a comprehensive analysis of the growth of Qatari market, and the major characteristics of two corporations, Almeera and Qatar Telecom, according to the following factors: Assets analysis Profit and return analysis Growth in shares Market analysis Risk analysis QATAR ECONOMY AND THE FINANCIAL SECTOR For hundreds of years it’s believed by many experts on an academic perspective that Qatar will be a nation where hydrocarbon exports will be the major export driver1, mainly due to the high consistency of the ongoing reserve, despite the geographical limits and relative small size of the country, and due to the increasing trend of oil prices. In this perspective it’s therefore believed that Qatar is and will continue to be a country where oil production and refinery will be a major contributor for the growth of the economy. Oil and Gas sectors, through all the production chain, from the extraction to the refinery and distribution (with the innovative presence of gas liquid transformation sites on the major cities) counts approximately for around 50 percent of the national GDP, according to many experts2. In addition to this, evidence has been found on the fact that oil counts for approximately 85% of export earnings, and 70% of government revenues. The revenues stemming from this sector and industry are very high, and count for the major part of gross national product. Meantime, the Governmental Intervention has recently deeply focused on the development, through appropriate and well -designed incentivizing schemes, the growth of the so called â€Å"knowledge economy†, so that the capability to increase the other sectors of the economy can be made possible on a larger perspective3. With the exception of Oil, other primary industries that are receiving major consideration in this sense are the following: Manufacturing indust ry (which can properly leverage on Health and Educational services: the central government has deeply incentivized the development of a proper net of educational institutions, so that skilled students can enter the labor market and improve the economic condition of the country also by competing with knowledge intensive industries as well. On an economic perspective the growth and the well - designed incentives for the economy have been deeply investigated, and their effectiveness has been already proved. On the other side, however, a major area of concern is related to the administrative and bureaucratic side, due to the fact that on a major and broader perspective a main limitation for foreign investors within the country and for internal entrepreneurs to grow and to expand their business Is highly dependent on the capability to adequately guarantee the administrative speed and accuracy of the operational activity of the companies operanting in this country: on a more precise basis , it’s widely believed that a necessary limit for further growth is related to the governmental authority increasing regulations that may pose a limit to the further development of small medium enterprises, which are the real engine of growth. The financial sector in this field is also increasing its role and

Human survival Essay Example for Free

Human survival Essay Wilson highlights the effects that the Homo sapiens have brought about in the world through what he refers to as a geophysical force, ranging from causing changes in the climate and the atmosphere to the modification of the fauna and flora. Besides, he reckons that in the history of evolution, it is only the human species that has tenuously advanced the complete mass in protoplasm. His claim that the human species’ destructive habits are maintained in their hereditary traits is credible. Apart from being tribal and assertively territorial, this species is oriented by selfish reproductive and sexual drive. Our actions lead to water and air pollution, lowering of the water tables and extinguishing of other species. The human’s nature juggernaut theory moreover explains why global responsibility comes last since the genetic heritages have led to humans being egocentric. They swiftly react to daily life minor problems and conflicts but inhumanly to similar magnitude status and tribal security challenges (Wilson, 1996). However, due to the exponential development in human populace and technology, the young generation has become more environmentally concerned than the older. Since they are in pursuit of better standards of living, they have intensified their scientific knowledge. This advancement has however led to more environmental destruction. Since humankind possesses intelligence and spirit, it has survived the ecological laws. However, these are not adequate to free this species from the natural environment’s constraints such as the almost exhausted resources and deteriorating atmospheric chemistry (Wilson, 1996). To free ourselves from the suicidal accusations, we ought to keep off civilization dimensions that are a threat to the environment. We have to be ethical so as to protect our self-images. In various arenas, environmental issues are being addressed as a moral issue and this will aid safeguard the surroundings. Even demographic statistics have reflected positive responses to this issue. With these signs of stabilizing the global environments, chances of preserving the ecosystems that are surviving and micromanaging them for the benefit of humankind remain strengthened.

Globalization: The Homogenization Of Cultures

Globalization: The Homogenization Of Cultures The increased integration of humanity beyond the national borders is compressing the world into an interdependent global village. Today, many equate the process of globalization with the promotion of interests of the West, whose hegemony is propagated through the idea of liberalism. As a result of the Western superior power and cultural imperialism, the so-called Third World countries feel compelled to admit their superiority and subsequently to acculturate themselves, accepting the Western way of life as a norm. The greatest consequence of this is homogenization of cultures and the loss of identity in the process of implementing Western ideologies. Today, the world we live in is taking part in the process of an increased integration through the movement of people and goods. The growing development of communication makes the unification of the entire globe seem as something completely natural. Globalization of our societies and every day lives à ¢Ã¢â€š ¬Ã‚ ¦ However, the question that is being imposed upon us is whether this compression of the world into one global society means that the world is being enriched and unified, or will it be torn apart by nations self-interest conflicts in the battle for preservation of their identities? The wide variety and diversity of our cultures and identities has always been, without a doubt, a part of who we are. Societies and cultures learn how to grow and prosper through overlapping and borrowing from each other. Some would argue that cultures should not be perceived as individual, but that they need to be examined in a more general way, since they constantly change and evolve. Cultures stopped being related to a mere geographical area and its society; nowadays, they are linked to the contemporary time that they exist in, as well as to the entire globe. Thanks to the process of globalization, today we have unique emerging cultures, such as Internet culture, artists culture, culture of the young people from around the world and others that are becoming a part of a universal set of values and ideas, turning the world into one global culture. However, while this unification of cultures has its benefits, at the same time it brings along the risk of an intercultural and identity-related conflict. For some people, their culture is everything that makes them who they are, it is an essential part of their identity. For example, in a case of a possible dispute between cultures that have confronting views and prejudice against each other, their people will hold on strongly to their national identity and culture, because they feel intimately related to it and see it as their protection. In an effort to preserve ones culture, language or religion, people very often become involved in conflicts. Most importantly, these conflicts becomes aggravated by the consuming influence of biased media Furthermore, as a result of negative stereotypes, different cultures may view each other as alien and threatening and can lead to a clash of civilizations, as Huntington refers to it.FOOTNOTE NEEDED Additionally, an increased interaction between cultures can lead to the creation of a unified culture imposed by the more influencing and dominating one. Therefore, this would lead to the homogenization of the world. This brings around cultural imperialism as an inherent part, as well as a product of the overall process of imperialism, where one country with dominant economy, culture and policy has control over others. This causes the local cultures, especially those in the so-called Third World countries, to be exploited and challenged by the dominant, most often Western values. Unsurprisingly, this comes as an effect of many centuries during which West had the chance to establish its dominance in the world. Cultural imperialism occurs when one culture is presented in such a manner that is seems undeveloped and non-modern when compared to another. Accordingly, the dominant cultures standards and norms become gradually accepted by the locals who believe in its superiority. This is why some intellectuals equate globalization with the Western imperialism; they argue that the West is imposing its ideas of liberalism onto the rest of the world through the process of globalization and therefore ensuring and reaffirming its hegemony. Instead of physically colonizing the rest of the world, the West has chosen more subtle means of propagating its ideas. The spread of Western, namely American goods around the world is not a simple coincidence- it is a part of the process of cultural imperialism. In addition, instead of being a simple trend of consumerism of American products, cultural imperialism implies the implementation of American ideas such as freedom of speech and democracy. As a result, this process leads to the steady disperse of unique cultures across the globe as t hey succumb to the influence of the more powerful American culture. So, whats in it for the West and America and whats their real motive? Many people believe that the main reason is the protection of the unlimited access to foreign markets, along with an actual and concrete belief in the American superiority by their citizens. However, it is simple to convince the Americans of their own superiority, but when convincing foreign cultures, they have to be more assertive and creative. Thus, marketing, along with advertising, plays an extremely important role in the process of Americanization. Its importance lies in the fact that it has the ability to persuade others in the modernity and the advanced stage of development of those American goods. Consequently, they begin to dominate local markets, doing no good to the local economy; hence, the local production industry weakens and gives way to the American economic interests. Another way of influencing local cultures and identities is through the vehicle of Internet. It plays a huge role in propagating the American culture, and enables it to be extremely exposed to the entire globe. However, the users of Internet that wish not to be exposed to the influence of American propagating contents can easily avoid it, since they are the active players in the seek of information online. Nevertheless, those who choose to be exposed to it, Internet can severely increase it. Governments are aware of this, and some of them, like the Chinese and Cuban, have restricted their citizens from the free flow of information, in order to prevent the Western influence. Oxymoronically, by restricting them, their governments are reassuring the fact that their citizens will not be the providers, but mere recipients of the Internet information flow. On the other hand, there is a substantial number of scholars who believe that the process of Americanizing the world is, as a matter of fact, a good thing for the entire world. They argue that through globalization, people become aware of the importance of strengthening their identity so they work on its preservation. In contrast to that, cultural imperialism can also lead to the establishment of a homogenized global identity that would help bring the world together. Accordingly, it would have a positive effect, hence the world will be more secure and stable through the elimination of the diverse and conflicting cultures. The Americans are already on the way to establish a single world society with minimum or no cultural restraints. However, the question being imposed on us is whether the uncertain assurance of a world peace is enough to justify the gradual disappearance of the numerous local cultures. Even though indigenous cultures are aware of the growing impact of American cultur al imperialism, there is not much they can do to stop it, since they are not strong enough to compete. They could try to limit the access to information, but that would contradict with the basic human rights which guarantee that everyone is able to attain free and unlimited knowledge and information through any means of media. Theoretically speaking, every nation, religion, race and ethnic group are equal, as long as they fulfill the needs of their people. Unfortunately, having superior and inferior, dominant and subordinate cultures, equality among them seem to be impossible. However, domination is nothing new- it has always existed throughout the history of the world, especially during colonization when Western powers believed they need to civilize the indigenous nations, while they were in fact exploiting them. The need for a cultural dialogue : When it comes to globalization and the issue of cultural imperialism, there seem to be two opposing views: some believe that the interaction and unification of cultures will lead to a clash of civilizations, while others claim it will bring around the greatly needed dialogue and cooperation. The global culture of today is, without a doubt, being shaped by the West. Nevertheless, it can and must be challenged by those that are being influenced by it, who should not just adopt their norms, but adapt and shape them so they fit the framework of their own culture and values. In addition, the fact that it is not just one culture influencing the other should not be overlooked; it is actually a process of mutual interaction and impact. Despite the fact that it is one of the modern worlds greatest challenges, intercultural dialogue is probably the best solution to counter cultural conflicts and crisis. Instead of simply succumbing to the influence, or doing the opposite- refraining and prohibiting the goods, people and world organizations should try appealing to the American governments to pass laws to restrain their companies from selling goods that endanger the survival of local market, and those companies should be prohibited from doing business. America must be fair and admit that perhaps what is good for its own economy, might not be good for the rest of the world and that the rights of people should be put before the need to make profit.

An introduction to the macroeconomics of walmart

An introduction to the macroeconomics of walmart Sam Walton, a leader with an innovative vision, started his own company and made it into the leader in discount retailing that it is today. Through his savvy, and sometimes unusual, business practices, he and his associates led the company forward for thirty years. Today, years after his death, the company is still growing steadily. Wal-Mart executives continue to rely on many of the traditional goals and philosophies that Sams legacy left behind, while also keeping one step ahead of the constantly changing technology and methods of todays fast-paced business environment. The organization has faced, and is still facing, a significant amount of controversy over several different issues; however, none of these have done much more than scrape the exterior of this gigantic operation. The future also looks bright for Wal-Mart, especially if it is able to strike a comfortable balance between increasing its profits and recognizing its social and ethical responsibilities. Why is Wal-Mart so Successful? In 1962, when Sam Walton opened the first Wal-Mart store in Rogers, Arkansas, no one could have ever predicted the enormous success this small-town merchant would have. Sam Waltons talent for discounts retailing not only made Wal-Mart the worlds largest retailer, but also the worlds number one retailer in sales. Indeed, Wal-Mart was named Retailer of the Decade by Discount Store News in 1989, and on several occasions has been included in Fortunes list of the 10 most admired corporations. Even with Waltons death (after a two-year battle with bone cancer) in 1992, Wal-Marts sales continue to grow significantly. Wal-Mart is successful not only because it makes sound strategic management decisions, but also for its innovative implementation of those strategic decisions. Regarded by many as the entrepreneur of the century, Walton had a reputation for caring about his customers, his employees (or associates as he referred to them), and the community. In order to maintain its market position in the discount retail business, Wal-Mart executives continue to adhere to the management guidelines Sam developed. Walton was a man of simple tastes and took a keen interest in people. He believed in three guiding principles: 1. Customer value and service;   2. Partnership with its associates; 3. Community involvement (The Story of Wal-Mart, 1995). The word always can be seen in virtually all of Wal-Marts literature. One of Waltons deepest beliefs was that the customer is always right, and his stores are still driven by this philosophy. When questioned about Wal-Marts secrets of success, Walton has been quoted as saying, It has to do with our desire to exceed our customers expectations every hour of every day (Wal-Mart Annual Report, 1994, p. 5). Waltons greatest accomplishment was his ability to empower, enrich, and train his employees (Longo, 1994). He believed in listening to employees and challenging them to come up with ideas and suggestions to make the company better. At each of the Wal-Mart stores, signs are displayed which read; Our People Make the Difference. Associates regularly make suggestions for cutting costs through their Yes We Can Sam program. The sum of the savings generated by the associates actually paid for the construction of a new store in Texas (The story of Wal-Mart, 1995). One of Wal-Marts goals was to provide its employees with the appropriate tools to do their jobs efficiently. The technology was not used as a means of replacing existing employees, but to provide them with a means to succeed in the retail market (Thompson Strickland, 1995). Wal-Marts popularity can be linked to its hometown identity. Walton believed that every customer should be greeted upon entering a store, and that each store should be a reflection of the values of its customers and its community. Wal-Mart is involved in many community outreach programs and has launched several national efforts through industrial development g rants. What are the Key Features of Wal-Marts Approach to Implementing the Strategy Put Together by Sam Walton The key features of Wal-Marts approach to implementing the strategy put together by Sam Walton emphasizes building solid working relationships with both suppliers and employees, being aware and taking notice of the most intricate details in store layouts and merchandising techniques, capitalizing on every cost saving opportunity, and creating a high performance spirit. This strategic formula is used to provide customers access to quality goods, to make these goods available when and where customers want them, to develop a cost structure that enables competitive pricing, and to build and maintain a reputation for absolute trustworthiness (Stalk, Evan, Shulman, 1992). Wal-Mart stores operate according to their Everyday Low Price philosophy. Wal-Mart has emerged as the industry leader because it has been better at containing its costs, which has allowed it to pass on the sav ings to its customers. Wal-Mart has become a capability competitor. It continues to improve upon its key business processes, managing them centrally and investing in them heavily for the long-term payback. Wal-Mart has been regarded as an industry leader in testing, adapting, and applying a wide range of cutting-edge merchandising approaches (Thompson Strickland, 1995, p. 860). Walton proved to be a visionary leader and was known for his ability to quickly learn from his competitors successes and failures. In fact, the founder of Kmart once claimed that Walton not only copied our concepts, he strengthened them. Sam just took the ball and ran with it (Thompson Strickland, 1995, p. 859). Wal-Mart has invested heavily in its unique cross-docking inventory system. Cross docking has enabled Wal-Mart to achieve economies of scale, which reduces its costs of sales. With this system, goods are continuously delivered to stores within 48 hours and often without having to inventory them. Low er prices also eliminate the expense of frequent sales promotions and sales are more predictable. Cross docking gives the individual managers more control at the store level. A company owned transportation system also assists Wal-Mart in shipping goods from warehouse to store in less than 48 hours. This allows Wal-Mart to replenish the shelves 4 times faster than its competition. Wal-Mart owns the largest and most sophisticated computer system in the private sector. It uses a MPP (massively parallel processor) computer system to track stock and movement which keeps it abreast of fast changes in the market (Daugherty, 1993). Information related to sales and inventory is disseminated via its advanced satellite communications system. Wal-Mart has leveraged its volume buying power with its suppliers. It negotiates the best prices from its vendors and expects commitments of quality merchandise (Thompson Strickland, 1995). The purchasing agents of Wal-Mart are very focused people. Their highest priority is making sure everybody at all times in all cases knows whos in charge, and its Wal-Mart (Vance Scott, 1995, p. 32). Even though Wal-Mart was tough in negotiating for absolute rock-bottom prices, the company worked closely with suppliers to develop mutual respect and to forge long-term partnerships that benefited both parties (Thompson Strickland, 1995, p. 866). Wal-Mart built an automated reordering system linking computers between Procter Gamble (PG) and its stores and distribution centers. The computer system sends a signal from a store to PG identifying an item low in stock. It then sends a resupply order, via satellite, to the nearest PG factory, which then ships the item to a Wal-Mart distribution center or directly to the store. This interaction between Wal-Mart and PG is a win-win proposition because with better coordination, PG can lower its costs and pass some of the savings on to Wal-Mart. Sam Walton received national attention through his Buy America policy. Through this plan, Wal-Mart encourages its buyers and merchandise managers to stock stores with American-made products. In a 1993 annual report management stated the program demonstrates a long-standing Wal-Mart commitment to our customers that we will buy American-made products whenever we can if those products deliver the same quality and affordability as their foreign-made counterparts (Thompson Strickland, 1995, p. 868). Environmental concerns are important to Wal-Mart. A prototype store was opened in Lawrence, Kansas, which was designed to be environmentally friendly. The store contains environmental education and recycling centers (Slezak, 1993). Wal-Mart has also adopted the low cost theme for its facilities. All offices, including the corporate headquarters, are built economically and furnished simply. To conserve energy, temperature controls are connected via computer to headquarters. Through these programs, Wal-Mart shows its concern for the community. Wal-Mart h as been led from the top but run from the bottom, a strategy developed by Sam Walton and carried on by a small group of senior executives led by CEO David Glass. Although recent growth has led Wal-Mart to add more management layers, senior executives strive to maintain its unique culture. This culture, described as one part Southern Baptist evangelism, one part University of Arkansas Razorback teamwork, and one part IBM hardware has worked to Wal-Marts advantage (Saporito, 1994, p. 62). Just how Successful is Wal-Mart? A forecast (see Appendix A) of Wal-Marts income for the period 1995-2000, considering increases of 30.6% in Net Sales, 27.7% in Operating Expenses, and 52.3% in Interest Debt (a level which is below Wal-Marts historically compounded growth rate of 55.6%) indicates that the company should continue to report gains each year until 2000. According to most analysts and company projections, sales should approximate $115 billion by 1996, representing an increase of 30.6% as compared to 1995. If the company continues at this pace, sales should reach $334 billion by the year 2000. The growth on sales that Wal-Mart reported during the 1980s and the beginning of the 1990s will be difficult to repeat, especially considering the ever-changing marketplace in which it competes. In an interview, Bill Fields, President of the Stores Division said, Wal-Mart is now seeing price pressure from companies that once assiduously avoided taking it on. These include specialty retailers such as Limited, category killers like Home Depot and Circuit City, and catalog companies like Spiegel. I think everybody prices off of Wal-Mart. Youve got Limited reaching levels wed thought theyd never get to. The result is that everyday low prices are getting lower (Saporito, 1994, p. 66). In addition, the baby-boomers are reaching their peak earnings years, when financial and personal priorities change. Thus, savings, not spending, will likely take precedence because most baby-boomers are approaching retirement. Based on Wal-Marts position in 1994, which was considered a year of expansion for the company, (Wal-Mart added 103 new discount stores, 38 Super-centers, 163 warehouse clubs, and 94,000 new associates) interest debt increased 52.3%. The cost paid by Wal-Mart to finance property plants and equipment forced the company to increase long term debt by 4.6 times during the period 1991-1995. Long term debt for 1995 is $7.9 billion. If Wal-Mart continues its expansion plans based on more debt acquisition at 1994 levels, the company may not attain forecasted gains by as early as 1998. Operating expenses will be a key strategic issue for Wal-Mart in order to maintain its position in the market. The challenge is how to run more stores with less operating expenses. According to Bill Fields,. . . the goal is to increase sales per square foot and drive operating costs down yet another notch (Saporito, 1994, p. 66). Trends indicate that operating expenses have been grow ing at a rate of 27.7% in recent years. However, Wal-Mart should reap the benefits of its investments in high technology, and be able to operate more stores without increasing its expenses. Cost of sales historically has been equal to the level of sales. If the company continues to take advantage of its buying power, Wal-Mart can expect to lower its cost of sales. Wal-Marts future will depend on how well the company manages its expansion plans. For the coming years, the company will need to justify its expansion plans with consistent growth in sales, in order to offset the increases in debt interest and operating expenses. What Problems are ahead for Wal-Mart? What Risks? Throughout the 1980s, Wal-Marts strategic intent was to unseat industry leaders Sears and Kmart, and become the largest retailer in the U.S. Wal-Mart accomplished this goal in 1991. But Wal-Marts current strong competitive position and its past rapid growth performance cant guarantee that the company will remain a s the industry leader or maintain its strong business position in the future. Carol Farmer, a retail consultant, told the Wall Street Journal that, One little bad thing can wipe out lots of good things (Trimble, 1990, p. 267). Every move in its business operation ought to be well thought-out and executed. Wal-Mart needs to address two major areas in order to maintain or to capture an even stronger long term business position: 1) Single-business strategy Wal-Marts success is mainly based on its concentration of a single-business strategy. This strategy has achieved enviable success over the last three decades without relying upon diversification to sustain its growth and competitive advantages. Given its current position in the industry, Wal-Mart may want to continue its single-business strategy and to push hard to maintain and increase market share. However, there is risk in this strategy, because concentration on a single-business strategy is similar to putting all of a firms eggs in one industry basket (Thompson Strickland, 1995, p. 187). In other words, if the retail industry stagnates due to an economic downturn, Wal-Mart might have difficulty achieving past profit performance. Also, if Wal-Mart continues to follow Sam Waltons vision of expansion, Wal-Mart will reach its peak in the very near future. When it does, its growth will start to slow down and the company will need to turn its strategic attention to diversification for future growth. Social responsibility Retail stores can compete on several bases: service, price, exclusivity, quality, and fashion. Wal-Mart has been extremely successful in competing in the retail industry by combining service, price, and quality. However, other merchants may object to Wal-Marts entry into their community. Because of its ability to out-price smaller competitors, Wal-Marts stores threaten smaller neighborhood stores which can only survive if they offer merchandise or services unavailable anywhere else. This makes it very hard for small businesses, such as mom-and-pop enterprises, to survive. They, therefore, fight to keep Wal-Mart from entering their locales. Numerous studies conducted in different states both support and criticize Wal-Mart (Verdisco, 1994). Nevertheless, Wal-Mart did drive local merchants out of business when it opened up stores in the same neighborhood. As a result, more and more rural communities are waging war against Wal-Marts entrance into their market. Besides protesting and signing petitions to attempt to stop Wal-Marts entry into their community, the oppositions efforts can even be found on The Internet. Gig Harbor, a small town in Washington, recently started a World Wide Web page entitled Us against the Wal. The towns neighborhood association promised that they will fight them [Wal-Mart] tooth and nail (PNA/Island Aerie Internet Productions, 1995/1996). The increasing opposition indicates that the road ahead for Wal-Mart may not be as smooth as Wal-Marts annual r eport would entail. This requires Wal-Mart to rethink its expansion strategy since it would not be profitable to operate in an unfriendly community. How Big Will Wal-Mart be in Five Years if all continues to go well? Before he died, Sam Walton expressed his belief that by the year 2000 Wal-Mart should be able to double the number of stores to about 3,000 and to reach sales of $125 billion annually. Walton predicted that the four biggest sources of growth potential would be the following: 1. Expanding into states where it had no stores;  Ã‚   2. continuing to saturate its current markets with new stores;   3. Perfecting the Super-center format to expand Wal-Marts retailing reach into the grocery and supermarket arena a market with annual sales of about $375 billion; 4. Moving into international markets (Thompson Strickland, 1995). Wal-Mart Super-centers represent leveraging on customer loyalty and procurement muscle in order to create a new domestic growth vehicle for the comp any. With few locations left in the U.S. to put a new Sams Club or traditional Wal-Mart, the Super-center division has emerged as the domestic vehicle for taking Wal-Mart to $100 billion in sales. Before the Super-center, Walton experimented with a massive Hyper-mart, encompassing more than 230,000 square feet in size. The idea failed. Customers complained that the produce was not fresh or well-presented and that it was difficult to find things in a store so big that inventory clerks had to wear roller skates. One of Waltons philosophies was that traveling on the road to success required failing at times. As a result of the unsuccessful experiment, Walton launched a revised concept: the Super-center, a combination discount and grocery store that was smaller than the Hyper-mart. The Super-center was intended to give Wal-Mart improved drawing power in its existing markets by providing a one-stop shopping destination. Super-centers would have the full array of general merchandise found in traditional Wal-Mart stores, as well as a full-scale supermarket, delicatessen, fresh bakery, and other specialty shops like hair salons, portrait studios, dry cleaners, and optical wear departments. Super-centers would measure 125,000 to 150,000 square feet, and target locations where sales per store of $30 to $50 million annually were feasible. Waltons prediction was right on target. The Super-center division more than doubled in size during 1993, then doubled again in 1994. Super-centers, once thought of as risky because of slim profit margins on the food side, will most likely make Wal-Mart the nations largest grocery retailer within the next five to seven years (Longo, 1994). Expanding overseas, Wal-Mart moved into the international market in 1991 through a joint-venture partnership with CIFRA S.A. de C.V., Mexicos leading retailer. Since then the company has entered Canada, Hong Kong, Mainland China, Puerto Rico, Argentina, and Brazil. The Wal-Mart International Division w as officially formed in 1994 to manage the companys international growth. By the year 2000, analysts expect Wal-Mart to be a huge international retailer, with numerous locations in South America, Europe, and Asia. The ever-changing market presents continuing challenges to retailers. First and foremost, retailers must recognize the strong implications of a buyers market (Lewison, 1994). Customers are being offered a wide choice of shopping experiences, but no one operation can capture them all. Therefore, it is incumbent upon management to define their target market and direct their energies toward solving that specific markets problems. Technology, demographics, consumer attitudes, and the advent of a global economy are all conspiring to rewrite the rules for success. Success in the next decade will depend upon the level of understanding retailers have about the new values, expectations, and needs of the customer. If Wal-Mart continues its customer-driven culture, it should remain a retail industry leader well into the next century. REFERENCES: Daugherty, R. (1993). New approach to retail signals strong future for point of purchase displays. Paperboard Packaging, pp. 24-27. Lewison, M. D. (1991). Retailing. New York: Macmillan. Longo, D. (1994). New generation of execs leads Wal-Mart into the next century. Discount Store News, pp. 45-47. PNA/Island Aerie Internet Productions (1995/1996). Us against the Wal. Gig Harbor, Washington: Peninsula Neighborhood Association. [Online] Available: http://www.harbornet.com/pna/. Saporito, B. (1994, May). And the winner is still . . . Wal-Mart. Fortune, pp. 62-68. Slezak, M. (1993). Seeds of environmental store planted in 1989. Discount Stores Inc., pp. 25-27. Stalk, G., Evans, P., Shulman, L. (1992, March-April). Competing on capabilities: the new rules of corporate strategy. Harvard Business Review, pp. 55-70. Thompson, A. A., Jr. Strickland, A.J. III. (1995). Strategic management concepts and cases (8th ed.). Chicago: I rwin. Trimble, V. H. (1990). Sam Walton: The inside story of Americas richest man. New York: Dutton. Vance, S., Scott, S. (1994). Wal-Mart: a history of Sam Waltons retail phenomenon. New York: Twayne. Verdisco, R. J. (1994, October). Superstores and Smallness. Discount Merchandiser, p. 8. Wal-Mart Stores, Inc. (1995). The story of Wal-Mart. Bentonville, Arkansas: Corporate Offices of Wal- Mart Stores, Inc. Wal-Mart Annual Report, 1994 Wal-Mart Annual Report, 1995

Essay --

Fear, suffering, danger, pain, and torture. These are all of the feelings that an abused animal feels. Only five states have had law officials directly take action against animal abuse. These states being: Idaho, Hawaii, Kentucky, Mississippi and North Dakota. Animals are abused to their deaths everyday. These owners or abusers have no appreciation for human or animal life at all. The abusers have been lucky enough to get away, with such a serious and cruel crime. And only facing the minimum punishment, or sometimes no punishment at all. Animals have just as much rights to live a happy abuse free life just like many of us do. Animal abusers need to face harsher consequences, before it begins a problem out of hand. In the following essay you will be able to comprehend and realize how bad these abused animals feel everyday. One of the first steps in saving animals and  ­creating effective laws is understanding what animal cruelty really is. There are two types of cruelty: Passive cruelty and Active cruelty. Passive cruelty is when the abuse happens as a result of neglect. It might s...

Dopplar Radar :: essays research papers

Doppler Radar The Social realm of Doppler radar relates to many different things we do in everyday life, anytime you are going outdoors anywhere in the world you can find out what it is going to be like before you even step outside. This is made possible with the use of Doppler Radar. In this section I am going to discuss the social realm of Doppler radar in the local, regional, national and global areas. First we must know what is Doppler radar? Doppler radar is a device that measures the Doppler shift in a radar beam reflected from an object’s motion towards or away from the radar aerial. (from WeatherOnline.com) In our local area we use Doppler radar for many different things in the social realm. We use is for safety when bad weather is near. Doppler radar has saved many lives since it was first used to track weather in @#$%$%%^ !#$%^?... When a tornado is near we take cover and when a flood is near we do all we can to protect what we can in the time we have. Fortunately we don’t live near the coast where hurricanes occur. It also helps us in the social realm in the winter when we have snow and ice, when driving conditions are at there worse. Nobody wants to risk their lives when the roads are icy so we tend to cancel more and more of our social gatherings during the winter, and if you have a television and or radio you can find out most of the cancellations before you head out the door and risk your life on snow and ice covered roads. Anyone and everyone who has a job that requires them to be outdoors is almost always watching the weather. Many different jobs depend on the weather, for instance concrete layers can’t pour concrete when it is raining, they also have to look to see when it is going to rain next, because they have to give the concrete time to set. Concrete workers also look at what the temperature is, the temperature can effect the way that a certain concrete will set, how long it will take and if it is too hot or cold out the concrete will crack. Concrete layers are always watching the weather because much of what they do depends on the weather. Another one of these jobs that requires a constant eye on the weather is farming.

Martin Luther King, Jr. Essay

Good vs. Evil has been a classic contrast used for centuries. It has been used in films, books, plays, and even children’s tales. But what constitutes good and evil? What determines if an act is good or evil? The things that we know, the things we believe, are not our own original ideas. That is a known fact. Everything we know and believe was influenced by our upbringing, our family and friends or lack of, our education; basically every thing that comes into contact with us. Even for the people who would say â€Å"I hated my parents and my education so they didn’t influence my beliefs! † Well, I’m sorry to be the one to tell you, but they did. The need that you may have had to rebel caused you to believe in opposite things from your family or whoever you wanted to rebel against. But thats another question for another chapter. In todays world, we trust our own beliefs as to what is good and what is evil. But what defines this? Most people would tell you that the â€Å"norm† defines good and evil. Society tells you that helping an old lady across the street is good and shooting a man in the head is evil. Don’t get me wrong though, I do believe in good and doing the right thing, I just want to portray a philosophical approach to this contrast. Back to the point, if everyone trusts the â€Å"norm† to decide what is good and what is evil; then isn’t that a form of mob mentality? Mob mentality is something that people are constantly warned about in literature through out time, an example being Mark Twain’s Huckleberry Finn. So I have reached a paradox. If the â€Å"norm† is decided by the majority of people, and the majority of people coming together to create an idea is mob mentality, and mob mentality is considered bad and wrong; then aren’t our ideas of good and evil created by something that is not good in the first place? If you are at this point reading and wondering what my answer will be to this question, I want to tell you now not to get your hopes up because I don’t have a difinitive answer to that. Let’s bring this idea back in time to the early times of human existence. What are a human’s basic needs? Food, water, clothing and shelter, right? I’ve heard this hundreds of times. Well if we humans are in fact animals, then we have a set of instinctive needs. Just like a new born cougar enters the world with instinct for hunting, don’t we as well? If society wasn’t here to set guidelines wouldn’t we just be living in and amongst our instinctive needs? If one of our instinctive needs is to eat, and some of us choose to eat dogs or cats (as they do in some countries) then why do we have animal help groups breathing down people’s necks to make this stop? Because it is evil, right? But is it really? I myself could not stand the thought of me eating a dog or cat, and that is because I come from a society where these animals are pets, your friends. But why is it wrong for people from another society to do this, when they don’t see it the same way we do? Who is right here? Of course, each side thinks they are right but is there a real answer to this question? Let’s give a scenario; two men break into your house, they kill everyone in your family except you and your mother. They put a gun to your mother’s head and say â€Å"We will kill her and you will get everything, the house, the car, the money, the only thing we require is that you join us and work for us. † What would you do? Do you take their offer and watch them kill your mother, or do you tell them no and die for it. It is a lose-lose situation, there is no realistic decision you could make that would create a win. If you let them kill your mother, you will live out the rest of your life with that hanging over your head. If you say no, then you both die. The people that are doing this are evil, right? Why? I would say because they are murdering innocent people, just wiping their existence away with the pull of a trigger. But do they think that? What if the person with the gun thought what he was doing was ok? What if he grew up on the streets and the only thing that he learned was violence. If violence was the norm for him, and it conflicts with our norm, which one is right? If you should always trust in your beliefs, what if your beliefs are wrong? Lets take an example from history. Martin Luther King Jr. vs. Hitler. Good vs. Evil, right? For argument’s sake, lets classify the general population of the world into two groups. Group A are the people who idolize MLK Jr. and despise Hitler. Group B are the people who idolize Hitler and despise MLK Jr. Both sides are amongst a group that holds the same beliefs and ideals as themselves. They all believe they are right, and if the idea of wrong and right is determined by the norm, and the norm is what the majority of people decides, then aren’t they both right? Doesn’t this faulty decision lead to extreme conflict? Look at all the past wars in this world. They all boil down to the basic fact that each side had conflicting beliefs and each side believed that they were doing the right thing. So does that make each side wrong or right? Good or Evil? What do you do to fix this major flaw in today’s society? Be yourself. Individuality. Don’t allow yourself to be too heavily influenced by the things around you. Take everything you see and keep it, soak it all up, leave no stone unturned, and when you think you have everything, then decide for yourself. The truth is what we all seek in one form or another. Some are content to leave things be and others aren’t. For those of us uncontent to settle for anything less than the truth, we are fighting a losing battle. I leave you with this quote from Wilkie Collins â€Å"Are there, infinitely varying with each individual, inbred forces of Good and Evil in all of us, deep down below the reach of mortal encouragement and mortal repression — hidden Good and hidden Evil, both alike at the mercy of the liberating opportunity and the sufficient temptation? â€Å"

The Geography of the Olympics

The London 2012 Olympics has had a massive effect on the world, in particular the UK. Geographically speaking the Olympic park is located in Stratford, East London. The Olympics is obviously a huge financial outlay, but it is not just for the 2 weeks of the games. Urban regeneration: The Stratford area was previously a under developed and unpleasant area of London. Due to the Olympics the ?4 billion urban regeneration of the 73 hectares of land within the M25 has been started, with Stratford at its heart. The new facilities will include over 100 shops, leisure facilities, hotels and schools. One area of Stratford is currently being developed to be the most significant business district since Canary Wharf, this is planned to provide space for up to 30’000 workers. Stratford’s residents have also benefitted from the athlete’s village, the poor standard of the previous housing has led to their demolition and residents will now be able to access the former athlete’s village as part of an affordable/social housing scheme. The inclusion of 11’000 new homes in the Olympic park area will provide what Boris Johnson dubbed â€Å"the most important urban regeneration project in the next 25 years. It was perhaps most needed in this area of London as it had one of the lowest GDP’s in Britain with unemployment peaking at 20% after the demise of what were once the world’s largest docks. The area was very undesirable and often dubbed stinky Stratford because of the slaughterhouses and noxious industries that operated there. A consequence of all this was the housing, before the Olympics it consisted of post-world war prefabs. (Sources: Gaurdian. co. uk/Live discussion- regeneration/ July 2012 & London2012. com/ Regeneration games/November 2011) Transport: With 204 countries competing in the 2012 and over 11 million tickets on sale, people from all around the globe will be travelling to see Olympic events. This influx of people needs significant public transport and a superb infrastructure in order to run smoothly. International arrivals/departures by plane relied on the continuous operation of major airports around the world and the transport links directly to major areas of London in particular, Stratford. This was facilitated by regular trains and buses running between the locations. Since the London 2012 games, Stratford train station has become the third largest station in the UK for the number of trains stopping there. The People: As well as including thousands of people from around the world the Olympics also managed to attract all age groups from young children to pensioners. This sets the Olympics apart from other events; the ability to include such a vast age range is incredibly hard it is event such as the Olympics that enable such a large demographic to come together. For the first time in Olympic history there was a female team member from each of the competing countries, this was a particular change for Saudi Arabia who let two women into the team this year in contrast to none in its Olympic history. The Finances: In the background of the photo it is clear to see the large steel structure. This was donated by Lakshmi Mittal, the owner of ArcelorMittal which is the world's leading integrated steel and mining company. The tower is named the ‘Orbit’ and is located in Orbit Circus to the East of the Olympic Stadium. Mr Mittal has long been a supporter of the Olympics, setting up a trust for aspiring Indian athletes after Indian won only one medal in the 2000 Olympics. Despite being of Indian origin he decided to fund the project in the UK, this clearly demonstrates a sense of globalisation as financial support came from philanthropists all over the world. The economic effects of the Olympics have also been demonstrated by many large corporations, such as Whitbread, the group including Premier Inn, 4 restaurant chains and Costa Coffee. They revealed that sales had pushed Whitbread to the top of the FTSE 100 risers, up 106p to ?22. 05. An average increase of around 5% across the group. Furthermore the construction of the Olympic sites has created 46’000 jobs, much of the workforce sourced locally to retain the financial benefits within the local area. Moreover the active encouragement of a healthy lifestyle generated by the Olympics has a significant impact upon the attitudes viewers have about sport and their health. Theoretically the long term effects of the Olympics could mean the government saves money in areas such as health care treatments associated with obesity and unhealthy living. This in turn would enable a higher proportion of taxes to be spent on further urban regeneration or other public interests. (Sources: Gaurdian. co. uk/Live discussion- regeneration/ July 2012 & Whitbread PLC/ Trading Update/ September 2012) The Economic benefits of the Olympics were hyped up to an un-believable level by some sources, figures circulated at around ?3. Billion from respected organizations such as Visa. This would have meant a 3. 5% rise in the UK’s overall economic output annually. It was also expected that between 2013-2015, all the UK regions would benefit financially totaling 2. 74 Billion in extra money spent by visitors. When broken down into sectors, the High street retailers were expected to gain the most totaling ?705 million, surprisingly the transport sector faired as the lowest e arner totaling just ?81 million. Therefore Visa came to the conclusion that the total ‘economic legacy’ would be ?5. 3 Billion by 2015. However, now the main Olympic Games have come to an end analysts, are broadcasting a contrasting opinions based on the financial figures from the games. The more realistic increase in the nation’s output for 2012 is likely to be around 1%, less than a third of the original predictions for the Olympics alone. This 1% would also include the Queen’s Diamond Jubilee which was estimated to have increase output by 0. 4% along with the 0. 1% of growth gained from ticket sales (doesn’t count as the Olympic effect) to a total of 0. %. So, even without the Olympic effect, output should increase by 0. 5% between the second and third quarters. For the economy to register even zero growth in 2012 as a whole output needs to rise by 1% this quarter and remain at that level in the final quarter. Several major think-tank’s and The Bank of England have cut the ir UK growth predictions to between 0% and -0. 7% after disappointing Olympic revenue. (Source: Visa Europe/Economic impact report/ July 2011 & Guardian. co. uk/Olympics-why the British economy isn’t a winner/August 2012)

Voluntary Active Euthanasia

Voluntary Active Euthanasia Carlene Lawrence Hodges University PHI 3601 OL3 November 19, 2012 Abstract This paper will discuss the benefits of the legalization of Voluntary Active Euthanasia (VAE). It will define the differences between Active Euthanasia and Physician Assisted Suicide, as well as the difference between active and passive. We will look at VAE from a legal perspective, with discussion about specific court cases that have set precedence in this matter. We will also look at it from a moral point of view; from a perspective of Utilitarian and Subjectivist principles, to show that VAE should be considered morally correct.Voluntary Active Euthanasia This paper will discuss the benefits of Active Voluntary Euthanasia (VAE). Although it is sometimes referred to as mercy killings, it is one of the most controversial topics in our world today. Many believe the right to live is one of the most important human rights. The right to die should be equally as important. First, we mus t discuss the difference between active and passive euthanasia. Active is the process by which a person is given something, such as a prescribed medication, to end their life, while passive is allowing a person to die naturally, not being given anything to help sustain their life.Second, we must not confuse VAE with Physician Assisted Suicide (PAS), as the two are quite different. With VAE, it is the doctor who administers life ending medications, with the patient’s permission, while with PAS, the patient is the one who ultimately ends their own life. It can be argued that there is no moral difference between active and passive, since the consequences, intentions, and actions are primarily the same. If medical treatment is withheld, allowing them to die naturally, this will prolong their pain and suffering, as well as that of their loved ones left to bear witness.It will also lead to large medical bills, which the families will be left to deal with. In an era where the cultur e is to provide rescue medicine, it is hard to decide what to do when facing end of life decisions for your loved ones. According to the Hippocratic Oath, physicians must â€Å"use treatment to help the sick according to my ability and judgment, but will not use it to injure or wrong them† (Friend, 2011). While the actual Oath has been rewritten many times over the years, to reflect cultural changes, it has the same essence. But, who decides what is considered as injuring or wronging them?One person may consider aiding in the death of another to be wrong, but the person dying may not. U. S. District Judge Barbara Rothstein (1194) wrote, â€Å"There is no more profoundly personal decision, no one which is closer to the heart of personal liberty, than the choice which a terminally ill person makes to end his or her suffering†. Assisted suicide and euthanasia have been worldly controversial for centuries. However, the first organizations created to support the legalizatio n of such were in 1935 and 1938, in Great Britain and the United States, respectively.Great strides have been made in the right direction though. Consider the case of Karen Ann Quinlan. In 1975, after mixing alcohol and drugs at a party, Karen become unconscious and slipped into a coma (Quinlan & Radimer, 2005). After months of watching their daughter suffer, being kept alive by machines, the family decided they knew their daughter would not want to live this way and requested she be taken off of the respirator. However, they quickly found out that their wish could not be carried out without a court order. They lost their first court battle in New Jersey Superior Court.They appealed this decision and ended up in New Jersey State Supreme Court, where by a unanimous decision, they won. Karen’s father, Joseph Quinlan, was names as Karen’s guardian, and was permitted to make all healthcare choices for her. Julia Quinlan, Karen’s mother, writes: The ruling gave patie nts and families the right to live each stage of life, including the last stage, with dignity and respect, and for medical institutions such as hospitals, hospices and nursing homes that would now be required to establish and maintain ethics committees.In addition, the Quinlan case led to the creation of the â€Å"living will,† sometimes called an â€Å"advanced directive,† which outlines the personal wishes of the individual in regard to â€Å"extraordinary means† to maintain life. (Quinlan 2005) In 1990, 40 states collectively passed laws allowing competent citizens the right to make living wills. These documents put the power back into the hands of the ill, by allowing their wishes and voices to be heard when they themselves are unable to speak.They instruct doctors to withhold life-supporting treatment and systems in the event a person becomes terminally ill. They can also instruct emergency doctors not to perform life resuscitating devices when a person has become injured or ill. It is the opinion of this writer and other proponents, like Compassion & Choices (http://www. compassionandchoices. org) that it become legal to include right to die choices like voluntary euthanasia. In ancient Rome and Greece, putting someone to death, or assisting in dying was acceptable in certain situations.For example, it was acceptable to put to death newborns with severe birth defects. It wasn’t until Christianity started developing in the West, that euthanasia was determined to be morally and ethically wrong. It was, and still is, seen as a â€Å"violation of God’s gift of life†. (Abdulkadir, Ansari, & Sambo, 2012, p 673). This is where the ethical debate inevitably ensues. Opponents mostly come from the medical profession as well as religious groups. They believe that medical providers should be more concerned with caring and healing then curing and the ultimate outcome.Legalizing active euthanasia could put too much power in th e hands of the medical professionals, allowing the ill to be easily swayed and opening up the option for many lawsuits from surviving family members who do not agree with the practice. Proponents reason that keeping someone alive with medications and medical instruments, when they would otherwise die is not sustaining a true life. Also, they believe that this is not a question of if someone is to die, but how much they suffer in the interim. The main concern of health providers should be to ease or eliminate pain and suffering.If we can accept that passive euthanasia (rejecting the use of life sustaining treatment) is ethically and morally correct, than we should also accept active euthanasia as well. Utilitarianism says that actions should be judges as morally acceptable or unacceptable based on increases and decreases in total happiness and/or misery (total meaning everyone involved, not just one individual (Barcalow, 2007). Using this as a guide, it can be determined that VAE wou ld essentially be reducing misery by allowing terminally ill, and sick to die nstead of suffering. Therefore, it would be morally acceptable. Let us look at VAE from a Subjectivism standpoint. Subjectivism claims that â€Å"whatever an individual believes to be right or wrong is right or wrong for that individual† (Barclow, 2007). Therefore, what may be morally correct for one person may not be for another. Under this principle, we should consider that if you believe VAE to be morally incorrect, that does not stand to reason all of society believes this as well. Let’s look at euthanasia another way.Merriam-Webster (2012) defines euthanasia as: â€Å"the act or practice of killing or permitting the death of hopelessly sick or injured individuals (as persons or domestic animals) in a relatively painless way for reasons of mercy†. In most states, where VAE is not legal, doctors are permitted to withhold medical treatment from a dying person, if that is their wish. While this is not considered actively administering life ending medication, it can still be considered actively allowing the person to die, if the treatment they are withholding would keep the person alive, even if only temporarily.When defending the case for active euthanasia, often the subject of our pets inevitably comes up. It is common practice when our pets become ill or injured, to put them out of their misery, we have them, as we say, ‘put to sleep’, or ‘put down’. You never hear of someone keeping their pet alive on life sustaining machines and medications. When asked why they chose to put down their pet, almost everyone answers with they couldn’t bear to see the animal suffer. So then why do feel the need to keep our humans alive? Currently there are four states in the U. S. hat have legalized active euthanasia; Oregon in 1994 by the Oregon Death and Dignity Act, , Texas in 1999 by the Texas Futile Care Law, Washington in 2008 by the Washin gton Death and Dignity Act and Montana in 2008 through a trial court ruling, Baxter vs. Montana. It is also legal in several European and eastern countries, such as Belgium, Columbia, and the Netherlands. It is legal in certain situations in Switzerland. In conclusion, using the Utilitarian and Subjectivism Moral Principles, should consider voluntary active euthanasia morally acceptable. References Abdulkadir, A. B. , Ansari, A. H. , & Sambo, A.O. (2012). The right to die via euthanasia: an expository study of the shari'ah and laws in selected jurisdictions. Advances in Natural and Applied Sciences, 673+ Barcalow, E. (2007). Moral philosophy: Theories and issues. (4th Ed. ed. ). Belmont: The Thomson Corporation. Daniel, P. S. (2011). Speaking of the value of life. Kennedy Institute of Ethics Journal,  21(2), 181-199,6. Euthanasia (a) in Merriam-webster online dictionary. (2012, March 09). Retrieved from http://www. merriam-webster. com/dictionary/euthanasia Friend, Mary Louanne,M. N. , R. N. (2011). Physician-assisted suicide: Death with dignity?Journal of Nursing Law,  14(3), 110-116. Doi Rothstein, B. R. (1994). Assisted suicide: Helping terminally ill. Knight-Ridder Newspapers, 12(10), 615. Mary, L. F. (2011). Physician-assisted suicide: Death with dignity? Journal of Nursing Law,  14(3), 110-116. doi/913146489 Quinlan, J. , ; Radimer, F. (2005). My joy, my sorrow. Cincinnati, OH: St. Anthony Messenger Press. Rachels, J. (1975) Active and passive euthanasia . The New England Journal of Medicine 292 78-80 Rachels, J. (2001) Killing and letting die. Encyclopedia of Ethics 2nd ed. 2 947-50 Steinbock, B. , ; Norcross, A. (1994). Killing and letting die. Fordham Univ Pr.

H2So3

H2SO3 Sulfurous acid is the chemical compound with the formula H2SO3. H2SO3 is a clear, colorless liquid with a sulfurous odor. It is a weak acid that is formed when sulfur dioxide is dissolved in water. Sulfurous acid is used as a bleaching and chemical reducing agent that is often used in medicine, throat and nasal sprays and skin lotions. Antiseptics, anti-fermentative, and antizymotics include sulfites that are formed from the acid. This compound is only stable in aqueous solutions, and decomposes back into sulfur dioxide and water when left standing.In addition, sulfurous acid is a crucial component to acid rain (1). H2SO3 causes burns in all exposure routes, its target organs are the respiratory system if inhaled, eyes through direct contact, skin through direct contact and gastrointestinal system if ingested. However, there is no chronic health hazards with H2SO3 (2). If Sulfurous acid is inhaled medical attention should be sought out immediately, the individual should be remo ved from the exposure to a more ventilated area with fresh air.If breathing remains difficult oxygen should be given, mouth to mouth should not be given if Sulfurous acid is inhaled or ingested. If Sulfurous acid makes direct contact to the eyes the eyes should be flushed immediately with a great deal of water for 15 minutes while lifting the lower and upper lids of the eye. medical attention should be sought out. If direct contact is made to the skin medical attention again should be sought out immediately. The skin should be flushed with water for 15 minutes and the contaminated clothing removed.And lastly, if the compound should be ingested vomiting should not be induced, medical attention should be sought out and poison control contacted. (2) Having exposure to to this compounds decomposition product sulfur dioxide in the air can reduce lung function and increase the likelihood of respiratory diseases and symptoms it has also been known to cause irritation of the eyes, nose and throat along with premature mortality. The elderly, children and individuals suffering already from respiratory conditions such as asthma are at a higher risk than most (3).Environments storing or utilizing this compound should be furnished with an eyewash station and a safety shower. and the compound should only be used under a fume hood. Protective eyewear, gloves and clothing should be worn when dealing with Sulfurous acid. In addition, a respirator protection program should be in used. The compound should be stored in a cool, dry place in a tightly closed container. Spills of Sulfurous acid should be absorbed with inert material and put in onto appropriate container.Wear a self contained breathing apparatus and appropriate personal protection. (2) The material that is left behind and cannot be saved or recycled should be managed in an appropriate waste facility where it can be analyzed for specific disposal requirements. Some state and local disposal regulations differ from fede ral requirement. It is crucial that the disposal of the container and unused material meets federal, state and local disposal requirements. (2) Bibliography 2. DuPont. (2006, October 14).Sulfur dioxide[Material Safety Data Sheet]. Retrieved from http://msds. dupont. com/msds/pdfs/EN/PEN_09004a2f8000730a. pdf 1. D. Sulzle, M. Verhoeven, J. K. Terlouw, H. Schwarz (1988). â€Å"Generation and Characterization of Sulfurous Acid (H2SO3) and of Its Radical Cation as Stable Species in the Gas Phase†. Angew. Chem. Int. Ed. Engl. 27: 1533–4. 3. Ostro, Bart. 1994. â€Å"Estimating the Health Effects of Air Pollutants: A Method with an Application to Jakarta. † Policy Research Working Paper 1301.

Cost Accounting Chapter 11

Horngren, C. T. , Datar, S. M. and Foster, G. (2003) Cost Accounting – A Managerial Emphasis, Pearson Education, Inc. , New Jersey, Eleventh Edition CHAPTER 11 DECISION MAKING AND RELEVANT INFORMATION 11-1 The five steps in the decision process outlined in Exhibit 11-1 of the text are: 1. 2. 3. 4. 5. Obtain information Make predictions about future costs Choose an alternative Implement the decision Evaluate performance to provide feedback 11-2 Relevant costs are expected future costs that differ among the alternative courses of action being considered.Historical costs are irrelevant because they are past costs and, therefore, cannot differ among alternative future courses of action. 11-3 No. Relevant costs are defined as those expected future costs that differ among alternative courses of action being considered. Thus, future costs that do not differ among the alternatives are irrelevant to deciding which alternative to choose. 11-4 Quantitative factors are outcomes that are m easured in numerical terms. Some quantitative factors are financial––that is, they can be easily expressed in monetary terms. Direct materials is an example of a quantitative financial factor.Qualitative factors are outcomes that are difficult to measure accurately in numerical terms. An example is employee morale. 11-5 Two potential problems that should be avoided in relevant cost analysis are: 1. 2. Do not assume all variable costs are relevant and all fixed costs are irrelevant. Do not use unit-cost data directly. It can mislead decision makers because a. it may include irrelevant costs, and b. comparisons of unit costs computed at different output levels lead to erroneous conclusions 11-6 No. Some variable costs may not differ among the alternatives under consideration and, hence, will be irrelevant.Some fixed costs may differ among the alternatives and, hence, will be relevant. 11-7 No. Some of the total unit costs to manufacture a product may be fixed costs, and, hence, will not differ between the make and buy alternatives. These fixed costs are irrelevant to the make-or-buy decision. The key comparison is between purchase costs and the costs that will be saved if the company purchases the component parts from outside plus the additional benefits of using the resources freed up in the next best alternative use (opportunity cost). 1-8 Opportunity cost is the contribution to income that is forgone (rejected) by not using a limited resource in its next-best alternative use. 11-1 11-9 No. When deciding on the quantity of inventory to buy, managers must consider both the purchase cost per unit and the opportunity cost of funds invested in the inventory. For example, the purchase cost per unit may be low when the quantity of inventory purchased is large, but the benefit of the lower cost may be more than offset by the high opportunity cost of the funds invested in acquiring and holding inventory. 1-10 No. Managers should aim to get the highest co ntribution margin per unit of the constraining (that is, scarce, limiting, or critical) factor. The constraining factor is what restricts or limits the production or sale of a given product (for example, availability of machine-hours). 11-11 No. For example, if the revenues that will be lost exceed the costs that will be saved, the branch or business segment should not be shut down. Shutting down will only increase the loss. Allocated costs are always irrelevant to the shutting down decision. 1-12 Cost written off as depreciation is irrelevant when it pertains to a past cost. But the purchase cost of new equipment to be acquired in the future that will then be written off as depreciation is often relevant. 11-13 No. Managers tend to favor the alternative that makes their performance look best so they focus on the measures used in the performance-evaluation model. If the performanceevaluation model does not emphasize maximizing operating income or minimizing costs, managers will most likely not choose the alternative that maximizes operating income or minimizes costs. 1-14 The three steps in solving a linear programming problem are: 1. 2. 3. Determine the objective function. Specify the constraints. Compute the optimal solution. 11-15 The text outlines two methods of determining the optimal solution to an LP problem: 1. Trial-and-error solution approach 2. Graphical solution approach Most LP applications in practice use standard software packages that rely on the simplex method to compute the optimal solution. 11-2 11-16 (20 min. ) Disposal of assets. 1. This is an unfortunate situation, yet the $80,000 costs are irrelevant regarding the decision to remachine or scrap.The only relevant factors are the future revenues and future costs. By ignoring the accumulated costs and deciding on the basis of expected future costs, operating income will be maximized (or losses minimized). The difference in favor of remachining is $3,000: (a) Remachine Future revenues Deduct future costs Operating income Difference in favor of remachining $35,000 30,000 $ 5,000 $3,000 (b) Scrap $2,000 – $2,000 2. This, too, is an unfortunate situation. But the $100,000 original cost is irrelevant to this decision.The difference in relevant costs in favor of rebuilding is $7,000 as follows: (a) Replace New truck Deduct current disposal price of existing truck Rebuild existing truck $102,000 10,000 – $ 92,000 $7,000 (b) Rebuild – – $85,000 $85,000 Difference in favor of rebuilding Note, here, that the current disposal price of $10,000 is relevant, but the original cost (or book value, if the truck were not brand new) is irrelevant. 11-3 11-17 (10 min. ) The careening personal computer. Considered alone, book value is irrelevant as a measure of loss when equipment is destroyed.The measure of the loss is replacement cost or some computation of the present value of future services lost because of equipment loss or damage. In the specific case des cribed, the following observations may be apt: 1. A fully depreciated item probably is relatively old. Chances are that the loss from this equipment is less than the loss for a partially depreciated item because the replacement cost of an old item would be far less than that for a nearly new item. 2. The loss of an old item, assuming replacement is necessary, automatically accelerates the timing of replacement.Thus, if the old item were to be junked and replaced tomorrow, no economic loss would be evident. However, if the old item were supposed to last five more years, replacement is accelerated five years. The best practical measure of such a loss probably would be the cost of comparable used equipment that had five years of remaining useful life. The fact that the computer was fully depreciated also means the accounting reports will not be affected by the accident. If accounting reports are used to evaluate the office manager's performance, the manager will prefer any accidents to be on fully depreciated units. 11-18 (15 min. Multiple choice. 1. (b) Special order price per unit Variable manufacturing cost per unit Contribution margin per unit Effect on operating income = $1. 50 ? 20,000 units = $30,000 increase $1,200,000 $48 9 $57 1,140,000 60,000 25,000 $ 85,000 $6. 00 4. 50 $1. 50 2. (b) Costs of purchases, 20,000 units ? $60 Total relevant costs of making: Variable manufacturing costs, $64 – $16 Fixed costs eliminated Costs saved by not making Multiply by 20,000 units, so total costs saved are $57 ? 20,000 Extra costs of purchasing outside Minimum overall savings for Reno Necessary relevant costs that would have to be saved in manufacturing Part No. 75 11-4 11-19 (30 min. ) Special order, activity-based costing (CMA, adapted). 1. Award Plus's operating income under the alternatives of accepting/rejecting the special order are: Without OneWith OneTime Only Time Only Special Order Special Order 7,500 Units 10,000 Units Revenues Variable costs: Direc t materials Direct manufacturing labor Batch manufacturing costs Fixed costs: Fixed manufacturing costs Fixed marketing costs Total costs Operating income 1 2 Difference 2,500 Units $250,000 87,500 100,000 12,500 –– –– 200,000 $ 50,000 $1,125,000 262,500 300,000 75,000 1,375,000 350,000 2 400,000 3 87,500 1 275,000 275,000 175,000 175,000 1,087,500 1,287,500 $ 37,500 $ 87,500 $300,000 ? 10,000 7,500 3 $262,500 ? 10,000 7,500 $75,000 + (25 ? $500) Alternatively, we could calculate the incremental revenue and the incremental costs of the additional 2,500 units as follows: Incremental revenue $100 ? 2,500 Incremental direct manufacturing costs Incremental direct manufacturing costs Incremental batch manufacturing costs Total incremental costs Total incremental operating income from accepting the special order $262,500 ? 2,500 7,500 300,000 ? ,500 7,500 $500 ? 25 $250,000 87,500 100,000 12,500 200,000 $ 50,000 Award Plus should accept the one-time-only specia l order if it has no long-term implications because accepting the order increases Award Plus's operating income by $50,000. If, however, accepting the special order would cause the regular customers to be dissatisfied or to demand lower prices, then Award Plus will have to trade off the $50,000 gain from accepting the special order against the operating income it might lose from regular customers. 11-5 11-19 (Cont’d. ) 2. Award Plus has a capacity of 9,000 medals.Therefore, if it accepts the special one-time order of 2,500 medals, it can sell only 6,500 medals instead of the 7,500 medals that it currently sells to existing customers. That is, by accepting the special order, Award Plus must forgo sales of 1,000 medals to its regular customers. Alternatively, Award Plus can reject the special order and continue to sell 7,500 medals to its regular customers. Award Plus's operating income from selling 6,500 medals to regular customers and 2,500 medals under one-time special order follow: Revenues (6,500 ? $150) + (2,500 ? 100) 1 1 Direct materials (6,500 ? $35 ) + (2,500 ? $35 ) 2 2 Direct manufacturing labor (6,500 ? $40 ) +(2,500 ? $40 ) 3 Batch manufacturing costs (130 ? $500) + (25 ? $500) Fixed manufacturing costs Fixed marketing costs Total costs Operating income 1 $1,225,000 315,000 360,000 77,500 275,000 175,000 1,202,500 $ 22,500 $35 = $262,500 7,500 2 $40 = 300,000 7,500 3 Award Plus makes regular medals in batch sizes of 50. To produce 6,500 medals requires 130 (6,500 ? 50) batches. Accepting the special order will result in a decrease in operating income of $15,000 ($37,500 – $22,500).The special order should, therefore, be rejected. A more direct approach would be to focus on the incremental effects––the benefits of accepting the special order of 2,500 units versus the costs of selling 1,000 fewer units to regular customers. Increase in operating income from the 2,500-unit special order equals $50,000 (requirement 1). The l oss in operating income from selling 1,000 fewer units to regular customers equals: Lost revenue, $150 ? 1,000 Savings in direct materials costs, $35 ? 1,000 Savings in direct manufacturing labor costs, $40 ? 1,000 Savings in batch manufacturing costs, $500 ? 0 Operating income lost $(150,000) 35,000 40,000 10,000 $ (65,000) Accepting the special order will result in a decrease in operating income of $15,000 ($50,000 – $65,000). The special order should, therefore, be rejected. 3. Award Plus should not accept the special order. Increase in operating income by selling 2,500 units under the special order (requirement 1) Operating income lost from existing customers ($10 ? 7,500) Net effect on operating income of accepting special order The special order should, therefore, be rejected. $ 50,000 (75,000) $(25,000) 11-6 11-20 (30 min. ) Make versus buy, activity-based costing. . The expected manufacturing cost per unit of CMCBs in 2004 is as follows: Total Manufacturing Manufactur ing Costs of CMCB Cost per Unit (1) (2) = (1) ? 10,000 $1,700,000 $170 450,000 45 120,000 12 320,000 800,000 $3,390,000 32 80 $339 Direct materials, $170 ? 10,000 Direct manufacturing labor, $45 ? 10,000 Variable batch manufacturing costs, $1,500 ? 80 Fixed manufacturing costs Avoidable fixed manufacturing costs Unavoidable fixed manufacturing costs Total manufacturing costs 2. The following table identifies the incremental costs in 2004 if Svenson (a) made CMCBs and (b) purchased CMCBs from Minton.Total Incremental Costs Make Buy $ 3,000,000 $1,700,000 450,000 120,000 320,000 $2,590,000 $3,000,000 $410,000 Per-Unit Incremental Costs Make Buy $300 $170 45 12 32 $259 $300 $41 Incremental Items Cost of purchasing CMCBs from Minton Direct materials Direct manufacturing labor Variable batch manufacturing costs Avoidable fixed manufacturing costs Total incremental costs Difference in favor of making Note that the opportunity cost of using capacity to make CMCBs is zero since Svenson woul d keep this capacity idle if it purchases CMCBs from Minton.Svenson should continue to manufacture the CMCBs internally since the incremental costs to manufacture are $259 per unit compared to the $300 per unit that Minton has quoted. Note that the unavoidable fixed manufacturing costs of $800,000 ($80 per unit) will continue to be incurred whether Svenson makes or buys CMCBs. These are not incremental costs under either the make or the buy alternative and are, hence, irrelevant. 3. Svenson should continue to make CMCBs. The simplest way to analyze this problem is to recognize that Svenson would prefer to keep any excess capacity idle rather than use it to make CB3s. Why?Because expected incremental future revenues from CB3s, $2,000,000 are less than expected incremental future costs, $2,150,000. If Svenson keeps its capacity idle, we know from requirement 2 that it should make CMCBs rather than buy them. 11-7 11-20 (Cont’d. ) An important point to note is that, because Svens on forgoes no contribution by not being able to make and sell CB3s, the opportunity cost of using its facilities to make CMCBs is zero. It is, therefore, not forgoing any profits by using the capacity to manufacture CMCBs. If it does not manufacture CMCBs, rather than lose money on CB3s, Svenson will keep capacity idle.A longer and more detailed approach is to use the total alternatives or opportunity cost analyses shown in Exhibit 11-7 of the chapter. Choices for Svenson Make CMCBs Buy CMCBs Buy CMCBs and Do Not and Do Not and Make Relevant Items Make CB3s Make CB3s CB3s TOTAL-ALTERNATIVES APPROACH TO MAKE-OR-BUY DECISIONS Total incremental costs of making/buying CMCBs (from requirement 2) Excess of future costs over future revenues from CB3s Total relevant costs $2,590,000 0 $2,590,000 $3,000,000 0 $3,000,000 $3,000,000 150,000 $3,150,000 Svenson will minimize manufacturing costs by making CMCBs.OPPORTUNITY-COST APPROACH TO MAKE-OR-BUY DECISIONS Total incremental costs of making/b uying CMCBs (from requirement 2) $2,590,000 $3,000,000 Opportunity cost: profit contribution forgone because capacity will not be used to make CB3s 0* 0* Total relevant costs $2,590,000 $3,000,000 $3,000,000 0 $3,000,000 *Opportunity cost is 0 because Svenson does not give up anything by not making CB3s. Svenson is best off leaving the capacity idle (rather than manufacturing and selling CB3s). 11-8 11-21 (10 min. ) Inventory decision, opportunity costs. 1. Unit cost, orders of 20,000 Unit cost, order of 240,000 (0. 5 ? $8. 00) Alternatives under consideration: (a) Buy 240,000 units at start of year. (b) Buy 20,000 units at start of each month. Average investment in inventory: (a) (240,000 ? $7. 60) ? 2 (b) ( 20,000 ? $8. 00) ? 2 Difference in average investment $8. 00 $7. 60 $912,000 80,000 $832,000 Opportunity cost of interest forgone from 240,000-unit purchase at start of year = $832,000 ? 0. 08 = $66,560 2. No. The $66,560 is an opportunity cost rather than an incremental or out lay cost. No actual transaction records the $66,560 as an entry in the accounting system. 3.The following table presents the two alternatives: Alternative A: Alternative B: Purchase Purchase 240,000 20,000 spark plugs at spark plugs beginning of at beginning year of each month Difference (1) (2) (3 )= (1) – (2) Annual purchase-order costs (1 ? $200; 12 ? $200) Annual purchase (incremental) costs (240,000 ? $7. 60; 240,000 ? $8) Annual interest income that could be earned if investment in inventory were invested (opportunity cost) (8% ? $912,000; 8% ? $80,000) Relevant costs $ 200 1,824,000 $ 2,400 1,920,000 $ (2,200) (96,000) 72,960 $1,897,160 6,400 $1,928,800 66,560 $ (31,640)Column (3) indicates that purchasing 240,000 spark plugs at the beginning of the year is preferred relative to purchasing 20,000 spark plugs at the beginning of each month because the lower purchase cost exceeds the opportunity cost of holding larger inventory. If other incremental benefits of holding l ower inventory such as lower insurance, materials handling, storage, obsolescence, and breakage costs were considered, the costs under Alternative A would have been higher, and Alternative B may have been preferred. 11-9 11-22 (20–25 min. ) Relevant costs, contribution margin, product emphasis. 1. Cola $18. 0 13. 50 $ 4. 50 Lemonade $19. 20 15. 20 $ 4. 00 Punch $26. 40 20. 10 $ 6. 30 Natural Orange Juice $38. 40 30. 20 $ 8. 20 Selling price Deduct variable cost per case Contribution margin per case 2. The argument fails to recognize that shelf space is the constraining factor. There are only 12 feet of front shelf space to be devoted to drinks. Sexton should aim to get the highest daily contribution margin per foot of front shelf space: Natural Orange Juice $ 8. 20 ? 5 Contribution margin per case Sales (number of cases) per foot of shelf space per day Daily contribution per foot of front shelf space 3.Cola $ 4. 50 ? 25 Lemonade $ 4. 00 ? 24 Punch $ 6. 30 ? 4 $112. 50 $96. 00 $25. 20 $41. 00 The allocation that maximizes the daily contribution from soft drink sales is: Daily Contribution per Foot of Front Shelf Space $112. 50 96. 00 41. 00 25. 20 Cola Lemonade Natural Orange Juice Punch Feet of Shelf Space 6 4 1 1 Total Contribution Margin per Day $ 675. 00 384. 00 41. 00 25. 20 $1,125. 20 The maximum of six feet of front shelf space will be devoted to Cola because it has the highest contribution margin per unit of the constraining factor.Four feet of front shelf space will be devoted to Lemonade, which has the second highest contribution margin per unit of the constraining factor. No more shelf space can be devoted to Lemonade since each of the remaining two products, Natural Orange Juice and Punch (that have the second lowest and lowest contribution margins per unit of the constraining factor) must each be given at least one foot of front shelf space. 11-10 11-23 (10 min. ) Selection of most profitable product. Only Model 14 should be produced. The ke y to this problem is the relationship of manufacturing overhead to each product.Note that it takes twice as long to produce Model 9; machine-hours for Model 9 are twice that for Model 14. Management should choose the product mix that maximizes operating income for a given production capacity (the scarce resource in this situation). In this case, Model 14 will yield a $9. 50 contribution to fixed costs per machine hour, and Model 9 will yield $9. 00: Model 9 Selling price Variable costs per unit Contribution margin per unit Relative use of machine-hours per unit of product Contribution margin per machine hour $100. 00 82. 00 $ 18. 00 ? 2 $ 9. 00 Model 14 $70. 00 60. 50 $ 9. 50 ? $ 9. 50 11-23 Excel Application Decision-Making and Relevant Information Body-Builders, Inc. Original Data Selling Price Costs Direct materials Direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead Marketing costs (all variable) Total costs Operating Income Model 9 $100. 00 2 8. 00 15. 00 25. 00 10. 00 14. 00 92. 00 $8. 00 $70. 00 13. 00 25. 00 12. 50 5. 00 10. 00 65. 50 $4. 50 Product Mix Analysis Selling price Variable cost per unit Contribution margin per unit Relative use of machine-hours per unit of product Contribution margin per machine-hour Model 9 $100 82. 0 18. 00 2 $9. 00 Model 14 $70 60. 50 9. 50 1 $9. 50 11-11 11-24 (20 min. ) Which base to close, relevant-cost analysis, opportunity costs. The future outlay operating costs will be $400 million regardless of which base is closed, given the additional $100 million in costs at Everett if Alameda is closed. Further, one of the bases will permanently remain open while the other will be shut down. The only relevant revenue and cost comparisons are: a. $500 million from sale of the Alameda base. Note that the historical cost of building the Alameda base ($100 million) is irrelevant.Note, also, that future increases in the value of the land at the Alameda base is also irrelevant. One of the bases mu st be kept open, so if it is decided to keep the Alameda base open, the Defense Department will not be able to sell this land at a future date. b. $60 million in savings in fixed income note if the Everett base is closed. Again, the historical cost of building the Everett base ($150 million) is irrelevant. The relevant costs and benefits analysis favors closing the Alameda base despite the objections raised by the California delegation in Congress. The net benefit equals $440 ($500 – $60) million. 11-25 (25? 0 min. ) Closing and opening stores. 1. Solution Exhibit 11-25, Column 1, presents the relevant loss in revenues and the relevant savings in costs from closing the Rhode Island store. Lopez is correct that Sanchez Corporation’s operating income would increase by $7,000 if it closes down the Rhode Island store. Closing down the Rhode Island store results in a loss of revenues of $860,000 but cost savings of $867,000 (from cost of goods sold, rent, labor, utilities, and corporate costs). Note that by closing down the Rhode Island store, Sanchez Corporation will save none of the equipment-related costs because this is a past cost.Also note that the relevant corporate overhead costs are the actual corporate overhead costs $44,000 that Sanchez expects to save by closing the Rhode Island store. The corporate overhead of $40,000 allocated to the Rhode Island store is irrelevant to the analysis. 2. Solution Exhibit 11-25, Column 2, presents the relevant revenues and relevant costs of opening another store like the Rhode Island store. Lopez is correct that opening such a store would increase Sanchez Corporation’s operating income by $11,000.Incremental revenues of $860,000 exceed the incremental costs of $849,000 (from higher cost of goods sold, rent, labor, utilities, and some additional corporate costs). Note that the cost of equipment written off as depreciation is relevant because it is an expected future cost that Sanchez will incur only i f it opens the new store. Also note that the relevant corporate overhead costs are the $4,000 of actual corporate overhead costs that Sanchez expects to incur as a result of opening the new store. Sanchez may, in fact, allocate more than $4,000 of corporate overhead to the new store but this allocation is irrelevant to the analysis. 1-12 11-25 (Cont’d. ) The key reason that Sanchez’s operating income increases either if it closes down the Rhode Island store or if it opens another store like it is the behavior of corporate overhead costs. By closing down the Rhode Island store, Sanchez can significantly reduce corporate overhead costs presumably by reducing the corporate staff that oversees the Rhode Island operation. On the other hand, adding another store like Rhode Island does not increase actual corporate costs by much, presumably because the existing corporate staff will be able to oversee the new store as well.SOLUTION EXHIBIT 11-25 Relevant-Revenue and Relevant-C ost Analysis of Closing Rhode Island Store and Opening Another Store Like It. Incremental (Loss in Revenues) Revenues and and Savings in (Incremental Costs) Costs from of Opening New Closing Rhode Store Like Rhode Island Store Island Store (1) (2) Revenues Cost of goods sold Lease rent Labor costs Depreciation of equipment Utilities (electricity, heating) Corporate overhead costs Total costs Effect on operating income (loss) $(860,000) 660,000 75,000 42,000 0 46,000 44,000 867,000 $ 7,000 $ 860,000 (660,000) (75,000) (42,000) (22,000) (46,000) (4,000) (849,000) $ 11,000 1-13 11-26 (20 min. ) Choosing customers. If Broadway accepts the additional business from Kelly, it would take an additional 500 machine-hours. If Broadway accepts all of Kelly’s and Taylor’s business for February, it would require 2,500 machine-hours (1,500 hours for Taylor and 1,000 hours for Kelly). Broadway has only 2,000 hours of machine capacity. It must, therefore, choose how much of the Taylor or Kelly business to accept. To maximize operating income, Broadway should maximize contribution margin per unit of the constrained resource. Fixed costs will remain unchanged at $100,000 regardless of the business Broadway chooses to accept in February, and is, therefore, irrelevant. ) The contribution margin per unit of the constrained resource for each customer in January is: Taylor Corporation $78,000 = $52 1,500 Kelly Corporation $32,000 = $64 500 Contribution margin per machine-hour Since the $80,000 of additional Kelly business in February is identical to jobs done in January, it will also have a contribution margin of $64 per machine-hour, which is greater than the contribution margin of $52 per machine-hour from Taylor.To maximize operating income, Broadway should first allocate all the capacity needed to take the Kelly Corporation business (1,000 machine-hours) and then allocate the remaining 1,000 (2,000 – 1,000) machine-hours to Taylor. Taylor Corporation $52 ? 1, 000 $52,000 Kelly Corporation $64 ? 1,000 $64,000 Total Contribution margin per machine-hour Machine-hours to be worked Contribution margin Fixed costs Operating income $116,000 100,000 $ 16,000 11-14 11-27 (30–40 min. ) Relevance of equipment costs. 1a. Statements of Cash Receipts and Disbursements Keep Year 2, 3, 4 $150,000 (110,000) (15,000)Year 1 Receipts from operations: Revenues Deduct disbursements: Other operating costs Operation of machine Purchase of â€Å"old† machine Purchase of â€Å"new† equipment Cash inflow from sale of old equipment Net cash inflow $150,000 (110,000) ( 15,000) (20,000)* Four Years Together $600,000 (440,000) (60,000) (20,000) Buy New Machine Four Year Years Year 1 2, 3, 4 Together $150,000 (110,000) (9,000) (20,000) (24,000) 8,000 $ (5,000) $150,000 (110,000) (9,000) $600,000 (440,000) (36,000) (20,000) (24,000) 8,000 $ 88,000 $ 5,000 $ 25,000 80,000 $ 31,000 *Some students ignore this item because it is the same for each altern ative. However, note that a statement for the entire year has been requested. Obviously, the $20,000 would affect Year 1 only under both the â€Å"keep† and â€Å"buy† alternatives. The difference is $8,000 for four years taken together. In particular, note that the $20,000 book value can be omitted from the comparison. Merely cross out the entire line; although the column totals are affected, the net difference is still $8,000. 11-15 11-27 (Cont’d. ) 1b.Again, the difference is $8,000: Income Statements Keep Year 1, 2, 3, 4 Revenues Costs (excluding disposal): Other operating costs Depreciation Operating costs of machine Total costs (excluding disposal) Loss on disposal: Book value (â€Å"cost†) Proceeds (â€Å"revenue†) Loss on disposal Total costs Operating income $150,000 110,000 5,000 15,000 130,000 Four Years Together $600,000 440,000 20,000 60,000 520,000 Buy New Machine Four Years Year Together Year 1 2, 3, 4 $150,000 $150,000 110,000 6,000 9,000 125,000 110,000 6,000 9,000 125,000 $600,000 440,000 24,000 36,000 500,000 20,000* (8,000) 12,000 512,000 $ 88,000 30,000 $ 20,000 520,000 $ 80,000 20,000 (8,000) 12,000 137,000 125,000 $ 13,000 $ 25,000 *As in part (1), the $20,000 book value may be omitted from the comparison without changing the $8,000 difference. This adjustment would mean excluding the depreciation item of $5,000 per year (a cumulative effect of $20,000) under the â€Å"keep† alternative and excluding the book value item of $20,000 in the loss on disposal computation under the â€Å"buy† alternative. 1c. The $20,000 purchase cost of the old equipment, the revenues, and the other costs are irrelevant because their amounts are common to both alternatives. 2.The net difference would be unaffected. Any number may be substituted for the original $20,000 figure without changing the final answer. Of course, the net cash outflows under both alternatives would be high. The Auto Wash manager really b lundered. However, keeping the old equipment will increase the cost of the blunder to the cumulative tune of $8,000 over the next four years. 3. Book value is irrelevant in decisions about the replacement of equipment, because it is a past (historical) cost. All past costs are down the drain. Nothing can change what has already been spent or what has already happened. The $20,000 has been spent.How it is subsequently accounted for is irrelevant. The analysis in requirement (1) clearly shows that we may completely ignore the $20,000 and still have a correct analysis. The only relevant items are those expected future items that will differ among alternatives. 11-16 11-27 (Cont’d. ) Despite the economic analysis shown here, many managers would keep the old machine rather than replace it. Why? Because, in many organizations, the income statements of part (2) would be a principal means of evaluating performance. Note that the first-year operating income would be higher under the à ¢â‚¬Å"keep† alternative.The conventional accrual accounting model might motivate managers toward maximizing their first-year reported operating income at the expense of long-run cumulative betterment for the organization as a whole. This criticism is often made of the accrual accounting model. That is, the action favored by the â€Å"correct† or â€Å"best† economic decision model may not be taken because the performance-evaluation model is either inconsistent with the decision model or because the focus is on only the short-run part of the performance-evaluation model. There is yet another potential conflict etween the decision model and the performance evaluation model. Replacing the machine so soon after it is purchased may reflect badly on the manager’s capabilities and performance. Why didn’t the manager search and find the new machine before buying the old machine? Replacing the old machine one day later at a loss may make the manager appear i ncompetent to his or her superiors. If the manager’s bosses have no knowledge of the better machine, the manager may prefer to keep the existing machine rather than alert his or her bosses about the better machine. 11-28 (30 min. Equipment upgrade versus replacement (A. Spero, adapted). 1. Solution Exhibit 11-28 presents a cost comparison of the upgrade and replacement alternatives for the three years taken together. It indicates that Pacifica Corporation should replace the production line because it is better off by $180,000 by replacing rather than upgrading. SOLUTION EXHIBIT 11-28 Comparing Upgrade and Replace Alternatives Three Years Together Upgrade Replace Difference (1) (2) (3) = (1) – (2) $2,160,000 $1,620,000 $ 540,000 (90,000) 90,000 300,000 $2,460,000 750,000 $2,280,000 (450,000) $ 180,000 Cash-operating costs, $12; $9 ? 80,000 Current disposal price One-time capital costs, written off periodically as depreciation Total relevant costs Note that sales and boo k value of the existing machine are the same under both alternatives and, hence, are irrelevant. 11-17 11-28 (Cont’d. ) 2a. Suppose the capital expenditure to replace the production line is $X. Using data from Solution Exhibit 11-28, the cost of replacing the production line is equal to $1,620,000 – $90,000 + $X. Using data from Solution Exhibit 11-28, the cost of upgrading the production line is equal to $2,160,000 + $300,000 = $2,460,000.We want to find $X such that $1,620,000 – $90,000 + $X = $2,460,000 that is, $1,530,000 + $X = $2,460,000 that is, $X = $2,460,000 – $1,530,000 or $X = $ 930,000 Pacifica would prefer replacing, rather than upgrading, the existing line if the replacement cost of the new line does not exceed $930,000. Note that the $930,000 can also be obtained by adding the $180,000 calculated in requirement 1 to the replacement cost of $750,000 for the new machine assumed in requirement 1 ($750,000 + $180,000 = $930,000). 2b. Suppose t he units produced and sold each year equal y.Using data from Solution Exhibit 11-28, the cost of replacing the production line is $9y – $90,000 + $750,000, while the cost of upgrading is $12y + $300,000. We solve for the y at which the two costs are the same. $9y – $90,000 + $750,000 $9y + $660,000 $3y y = = = = $12y + $300,000 $12y + $300,000 $360,000 120,000 units For expected production and sales of less than 120,000 units over 3 years (40,000 units per year), the upgrade alternative is cheaper. When production and sales are low, the higher operating costs of upgrading are more than offset by the significant savings in capital costs when upgrading relative to replacing.For expected production and sales exceeding 120,000 units over 3 years, the replace alternative is cheaper. For high output, the benefits of the lower operating costs of replacing, relative to upgrading, exceed the higher capital costs. 3. Operating income for the first year under the upgrade and repl ace alternatives are as follows: Upgrade Replace Revenues $25 ? 60,000 $1,500,000 $1,500,000 Cash-operating costs $12 ? 60,000, $9 ? 60,000 720,000 540,000 a b Depreciation 220,000 250,000 c Loss on disposal of old production line –– 270,000 Total costs 940,000 1,060,000 Operating income $ 560,000 $ 440,000 a $360,000 + $300,000) ? 3 = $220,000 $750,000 ? 3 = $250,000 c Book value – current disposal price = $360,000 – $90,000 = $270,000 b First-year operating income is higher by $120,000 under the upgrade alternative. If first year's operating income is an important component of Azinger's bonus, he would prefer the upgrade over the replace alternative even though the decision model (in requirement 1) prefers the replace to the upgrade alternative. This exercise illustrates the conflict between the decision model and the performance evaluation model. 11-18 11-29 (30 min. Contribution approach, relevant costs. 1. Average one-way fare per passenger Commissio n at 8% of $500 Net cash to Air Frisco per ticket Average number of passengers per flight Revenues per flight ($460 ? 200) Food and beverage cost per flight ($20 ? 200) Total contribution margin from passengers per flight 2. If fare is Commission at 8% of $480 Net cash per ticket Food and beverage cost per ticket Contribution margin per passenger Total contribution margin from passengers per flight ($421. 60 ? 212) All other costs are irrelevant. $ 500 40 $ 460 ? 200 $92,000 4,000 $88,000 $480. 0 38. 40 441. 60 20. 00 $421. 60 $89,379. 20 On the basis of quantitative factors alone, Air Frisco should decrease its fare to $480 because reducing the fare gives Air Frisco a higher contribution margin from passengers ($89,379. 20 versus $88,000). 3. In evaluating whether Air Frisco should charter its plane to Travel International, we compare the charter alternative to the solution in requirement 2 because requirement 2 is preferred to requirement 1. Under requirement 2, contribution from passengers Deduct fuel costs Total contribution per flight $89,379. 0 14,000. 00 $75,379. 20 Air Frisco gets $74,500 per flight from chartering the plane to Travel International. On the basis of quantitative financial factors, Air Frisco is better off not chartering the plane and, instead, lowering its own fares. Other qualitative factors that Air Frisco should consider in coming to a decision are: a. The lower risk from chartering its plane relative to the uncertainties regarding the number of passengers it might get on its scheduled flights. b. The stability of the relationship between Air Frisco and Travel International.If this is not a long-term arrangement, Air Frisco may lose current market share and not benefit from sustained charter revenues. 11-19 11-30 (30 min. ) Relevant costs, opportunity costs. 1. Easyspread 2. 0 has a higher relevant operating income than Easyspread 1. 0. Based on this analysis, Easyspread 2. 0 should be introduced immediately: Easyspread 1. 0 $150 $ 0 0 $150 Easyspread 2. 0 $185 $25 25 $160 Relevant revenues Relevant costs: Manuals, diskettes, compact discs Total relevant costs Relevant operating income Reasons for other cost items being irrelevant are: Easyspread 1. †¢ Manuals, diskettes—already incurred †¢ Development costs—already incurred †¢ Marketing and administrative—fixed costs of period Easyspread 2. 0 †¢ Development costs—already incurred †¢ Marketing and administration—fixed costs of period Note that total marketing and administration costs will not change whether Easyspread 2. 0 is introduced on July 1, 2003, or on October 1, 2003. 2. Other factors to be considered: a. Customer satisfaction. If 2. 0 is significantly better than 1. 0 for its customers, a customer driven organization would immediately introduce it unless other factors offset this bias towards â€Å"do what is best for the customer. b. Quality level of Easyspread 2. 0. It is critical for new s oftware products to be fully debugged. Easyspread 2. 0 must be error-free. Consider an immediate release only if 2. 0 passes all quality tests and can be fully supported by the salesforce. c. Importance of being perceived to be a market leader. Being first in the market with a new product can give Basil Software a â€Å"first-mover advantage,† e. g. , capturing an initial large share of the market that, in itself, causes future potential customers to lean towards purchasing Easyspread 2. 0. Moreover, by introducing 2. earlier, Basil can get quick feedback from users about ways to further refine the software while its competitors are still working on their own first versions. Moreover, by locking in early customers, Basil may increase the likelihood of these customers also buying future upgrades of Easyspread 2. 0. d. Morale of developers. These are key people at Basil Software. Delaying introduction of a new product can hurt their morale, especially if a competitor then preem pts Basil from being viewed as a market leader. 11-20 11-31 (20 min. ) Opportunity costs (H. Schaefer). 1.The opportunity cost to Wolverine of producing the 2,000 units of Orangebo is the contribution margin lost on the 2,000 units of Rosebo that would have to be forgone, as computed below: Selling price Variable costs per unit: Direct materials Direct manufacturing labor Variable manufacturing overhead Variable marketing costs Contribution margin per unit Contribution margin for 2,000 units $20 $2 3 2 4 11 $ 9 $ 18,000 The opportunity cost is $18,000. Opportunity cost is the maximum contribution to operating income that is forgone (rejected) by not using a limited resource in its next-best alternative use. . Contribution margin from manufacturing 2,000 units of Orangebo and purchasing 2,000 units of Rosebo from Buckeye is $16,000, as follows: Manufacture Orangebo Selling price Variable costs per unit: Purchase costs Direct materials Direct manufacturing labor Variable manufacturing costs Variable marketing overhead Variable costs per unit Contribution margin per unit Contribution margin from selling 2,000 units of Orangebo and 2,000 units of Rosebo $15 – 2 3 2 2 9 $ 6 $12,000 Purchase Rosebo $20 14 Total 4 18 $ 2 $4,000 $16,000As calculated in requirement 1, Wolverine's contribution margin from continuing to manufacture 2,000 units of Rosebo is $18,000. Accepting the Miami Company and Buckeye offer will cost Wolverine $2,000 ($16,000 – $18,000). Hence, Wolverine should refuse the Miami Company and Buckeye Corporation's offers. 3. The minimum price would be $9, the sum of the incremental costs as computed in requirement 2. This follows because, if Wolverine has surplus capacity, the opportunity cost = $0. For the short-run decision of whether to accept Orangebo's offer, fixed costs of Wolverine are irrelevant.Only the incremental costs need to be covered for it to be worthwhile for Wolverine to accept the Orangebo offer. 11-21 11-32 (30-40 min. ) Product mix, relevant costs (N. Melumad, adapted). 1. Selling price Variable manufacturing cost per unit Variable marketing cost per unit Total variable costs per unit Contribution margin per unit Contributi on margin per hour of the constraine d resource (the regular machine) Total contribution margin from selling only R3 or only HP6 R3: $25 ? 50,000; HP6: $30 ? 0,000 Less Lease costs of high-precision machine to produce and sell HP6 Net relevant benefit R3 $100 60 15 75 $ 25 $25 = $25 1 HP6 $150 100 35 135 $ 15 $15 = $30 0. 5 $1,250,000 ? $1,250,000 $1,500,000 300,000 $1,200,000 Even though HP6 has the higher contribution margin per unit of the constrained resource, the fact that Pendleton must incur additional costs of $300,000 to achieve this higher contribution margin means that Pendleton is better off using its entire 50,000-hour capacity on the regular machine to produce and sell 50,000 units (50,000 hours ? 1 hour per unit) of R3.The additional contribution from selling HP6 rather than R3 is $250,000 ($1,500,000 ? $1,250,000), which is not enough to cover the additional costs of leasing the high-precision machine. Note that, because all other overhead costs are fixed and cannot be changed, they are irrelevant for the decision. 2. If capacity of the regular machines is increased by 15,000 machine-hours to 65,000 machine-hours (50,000 originally + 15,000 new), the net relevant benefit from producing R3 and HP6 is as follows: R3 Total contribution margin from selling only R3 or only HP6 R3: $25 ? 5,000; HP6: $30 ? 65,000 Less Lease costs of high-precision machine that would be incurred if HP6 is produced and sold Less Cost of increasing capacity by 15,000 hours on regular machine Net relevant benefit HP6 $1,625,000 $1,950,000 300,000 150,000 150,000 $1,475,000 $1,500,000 11-22 11-32 (Cont’d. ) Investing in the additional capacity increases Pendleton’s operating income by $250,000 ($1,500,000 calculated in requirement 2 minus $1,250,000 calc ulated in requirement 1), so Pendleton should add 15,000 hours to the regular machine.With the extra capacity available to it, Pendleton should use its entire capacity to produce HP6. Using all 65,000 hours of capacity to produce HP6 rather than to produce R3 generates additional contribution margin of $325,000 ($1,950,000 ? $1,625,000) which is more than the additional cost of $300,000 to lease the highprecision machine. Pendleton should therefore produce and sell 130,000 units of HP6 (65,000 hours ? 0. 5 hours per unit of HP6) and zero units of R3. 3.R3 Selling price Variable manufacturing costs per unit Variable marketing costs per unit Total variable costs per unit Contribution margin per unit Contributi on margin per hour of the constraine d resource (the regular machine) $100 60 15 75 $ 25 $25 = $25 1 HP6 $150 100 35 135 $ 15 S3 $120 70 15 85 $ 35 $15 $35 = $30 = $35 0 . 5 1 The first step is to compare the operating profits that Pendleton could earn if it accepted the Carter Corporation offer for 20,000 units with the operating profits Pendleton is currently earning.S3 has the highest contribution margin per hour on the regular machine and requires no additional investment such as leasing a high-precision machine. To produce the 20,000 units of S3 requested by Carter Corporation, Pendleton would require 20,000 hours on the regular machine resulting in contribution margin of $35 ? 20,000 = $700,000. Pendleton now has 45,000 hours available on the regular machine to produce R3 or HP6. R3 Total contribution margin from selling only R3 or only HP6 R3: $25 ? 45,000; HP6: $30 ? 45,000 Less Lease osts of high-precision machine to produce and sell HP 6 Net relevant benefit HP6 $1,125,000 $1,350,000 ? 300,000 $1,125,000 $1,050,000 Pendleton should use all the 45,000 hours of available capacity to produce 45,000 units of R3. Thus, the product mix that maximizes operating income is 20,000 units of S3, 45,000 units of R3, and zero units of HP6. This optimal mix res ults in a contribution margin of $1,825,000 ($700,000 from S3 and $1,125,000 from R3). Relative to requirement 2, operating income increases by $325,000 ($1,825,000 minus $1,500,000 calculated in requirement 2).Hence, Pendleton should accept the Carter Corporation business and supply 20,000 units of S3. 11-23 11-33 (35–40 min. ) Discontinuing a product line, selling more units. 1. The incremental revenue losses and incremental savings in cost by discontinuing the Tables product line follows: Difference: Incremental (Loss in Revenues) and Savings in Costs from Dropping Tables Line Revenues Direct materials and direct manufacturing labor Depreciation on equipment Marketing and distribution General administration Corporate office costs Total costs Operating income (loss) $(500,000) 300,000 0 70,000 0 0 370,000 $(130,000)Dropping the Tables product line results in revenue losses of $500,000 and cost savings of $370,000. Hence, Grossman Corporation’s operating income will b e $130,000 higher if it does not drop the Tables line. Note that, by dropping the Tables product line, Home Furnishings will save none of the depreciation on equipment, general administration costs, and corporate office costs, but it will save variable manufacturing costs and all marketing and distribution costs on the Tables product line. . Grossman’s will generate incremental operating income of $128,000 from selling 4,000 additional tables and, hence, should try to increase table sales. The calculations follow: Incremental Revenues (Costs) and Operating Income $500,000 (300,000) (42,000)* (30,000)†  0** 0** $128,000 Revenues Direct materials and direct manufacturing labor Cost of equipment written off as depreciation Marketing and distribution costs General administration costs Corporate office costs Operating income Note that the additional costs of equipment are relevant future costs for the â€Å"selling more tables decision† because they represent increment al future costs that differ between the alternatives of selling and not selling additional tables. † Current marketing and distribution costs which varies with number of shipments = $70,000 – $40,000 = $30,000. As the sales of tables double, the number of shipments will double, resulting in incremental marketing and distribution costs of (2 ? $30,000) – $30,000 = $30,000. *General administration and corporate office costs will be unaffected if Grossman decides to sell more tables. Hence, these costs are irrelevant for the decision. 11-24 11-34 (30 min. ) Discontinuing or adding another division (continuation of 11-33). 1. Solution Exhibit 11-34, Column 1, presents the relevant loss of revenues and the relevant savings in costs from closing the Northern Division. As the calculations show, Grossman’s operating income would decrease by $140,000 if it shut down the Northern Division (loss in revenues of $1,500,000 versus savings in costs of $1,360,000).Grossman will save variable manufacturing costs, marketing and distribution costs, and division general administration costs by closing the Northern Division but equipment-related depreciation and corporate office allocations are irrelevant to the decision. Equipment-related costs are irrelevant because they are past costs (and the equipment has zero disposal price). Corporate office costs are irrelevant because Grossman will not save any actual corporate office costs by closing the Northern Division. The corporate office costs that used to be allocated to the Northern Division will be allocated to other divisions. . The manager at corporate headquarters responsible for making the decision is evaluated on Northern Division’s operating income after allocating corporate office costs. The manager will evaluate the options as follows: If the manager does not close the Northern Division in 2002, the division is expected to show an operating loss of $110,000 after allocating all corporate office costs. If the manager closes the Northern Division, the division would show an operating loss of $100,000 from the write off of equipment.It would show no revenues and, hence, would not attract any corporate office costs. It would also not incur any manufacturing, marketing and distribution, and general administration costs. From the viewpoint of maximizing the operating income against which the manager is evaluated, the manager would prefer to shut down Northern Division (and show an operating loss of $100,000 instead of an operating loss of $110,000 by operating it). In fact, the manager might argue that even the $100,000 operating loss is more a consequence of accounting write offs rather than a â€Å"real† operating loss.Recall from requirement 1 that the decision model favored keeping the Northern Division open. The performance evaluation model of the manager making the decision suggests that the Northern Division be closed. Hence, the performance evaluation model is inconsistent with the decision model. 3. Solution Exhibit 11-34, Column 2, presents the relevant revenues and relevant costs of opening the Southern Division (a division whose revenues and costs are expected to be identical to the revenues and costs of the Northern Division).Grossman should open the Southern Division because it would increase operating income by $40,000 (increase in relevant revenues of $1,500,000 and increase in relevant costs of $1,460,000). The relevant costs include direct materials, direct manufacturing labor, marketing and distribution, equipment, and division general administration costs but not corporate office costs. Note, in particular, that the cost of equipment written off as depreciation is relevant because it is an expected future cost that Grossman will incur only if it opens the Southern Division.Corporate office costs are irrelevant because actual corporate office costs will not change if Grossman opens the Southern Division. The current corpora te staff will be able to oversee the Southern Division’s operations. Grossman will allocate some corporate office costs to the Southern Division but this allocation represents corporate office costs that are already currently being allocated to some other division. Because actual total corporate office costs do not change, they are irrelevant to the division. 1-25 11-34 (Cont’d. ) SOLUTION EXHIBIT 11-34 Relevant-Revenue and Relevant-Cost Analysis for Closing Northern Division and Opening Southern Division Incremental (Loss in Revenues) Revenues and and Savings in (Incremental Costs) Costs from Closing from Opening Northern Division Southern Division (1) (2) $(1,500,000) $1,500,000 825,000 0 205,000 330,000 0 1,360,000 $ (140,000) (825,000) (100,000) (205,000) (330,000) 0 (1,460,000) $ 40,000Revenues Variable direct materials and direct manufacturing labor costs Equipment cost written off as depreciation Marketing and distribution costs Division general administration c osts Corporate office costs Total costs Effect on operating income (loss) 11-35 (30–40 min. ) Make or buy, unknown level of volume (A. Atkinson). 1. Let X = 1 starter assembly. The variable costs required to manufacture 150,000X are: Direct materials Direct manufacturing labor Variable manufacturing overhead Total variable costs $200,000 150,000 100,000 $450,000 The variable costs per unit are $450,000 ? 150,000 = $3. 00 per unit. 11-26 11-35 (Cont’d. The data can be presented in both â€Å"all data† and â€Å"relevant data† formats: All Data Relevant Data Alternative Alternative Alternative Alternative 1: 2: 1: 2: Buy Make Buy Make Variable manufacturing costs $ 3X – $ 3X – Fixed general manufacturing overhead 150,000 $150,000 – – Fixed overhead, avoidable 100,000 – 100,000 – Division 2 manager's salary 40,000 50,000 40,000 $50,000 Division 3 manager's salary 50,000 – 50,000 – Purchase cost, if boug ht from Tidnish Electronics – 4X – 4X Total $340,000 $200,000 $190,000 $50,000 + $ 3X + $ 4X + $ 3X + $ 4X The number of units at which the costs of make and buy are equivalent is: All data analysis: or Relevant data analysis: $340,000 + $3X = $200,000 + $4X X = 140,000 $190,000 + $3X = $50,000 + $4X X = 140,000Assuming cost minimization is the objective, then: †¢ If production is expected to be less than 140,000 units, it is preferable to buy units from Tidnish. †¢ If production is expected to exceed 140,000 units, it is preferable to manufacture internally (make) the units. †¢ If production is expected to be 140,000 units, this is the indifference point between buying units from Tidnish and internally manufacturing (making) the units. 2. The information on the storage cost, which is avoidable if self-manufacture is discontinued, is relevant; these storage charges represent current outlays that are avoidable if self-manufacture is discontinued. Assume t hese $50,000 charges are represented as an opportunity cost of the make alternative.The costs of internal manufacture that incorporate this $50,000 opportunity cost are: All data analysis: Relevant data analysis: All data analysis: Relevant data analysis: $390,000 + $3X $240,000 + $3X $390,000 + $3X X $240,000 + $3X X = = = = $200,000 + $4X 190,000 $50,000 + $4X 190,000 The number of units at which the costs of make and buy are equivalent is: If production is expected to be less than 190,000, it is preferable to buy units from Tidnish. If production is expected to exceed 190,000, it is preferable to manufacture the units internally. 11-27 11-36 (30 min. ) Make versus buy, activity-based costing, opportunity costs (N. Melumad and S. Reichelstein, adapted). 1. Relevant costs under buy alternative: Purchases, 10,000 ? $8. 0 Relevant costs under make alternative: Direct materials Direct manufacturing labor Variable manufacturing overhead Inspection, setup, materials handling Machine ren t Total relevant costs under make alternative $82,000 $40,000 20,000 15,000 2,000 3,000 $80,000 The allocated fixed plant administration, taxes, and insurance will not change if Ace makes or buys the chains. Hence, these costs are irrelevant to the make-or-buy decision. The analysis indicates that Ace should not buy the chains from the outside supplier. 2. Relevant costs under the make alternative: Relevant costs (as computed in requirement 1) Relevant costs under the buy alternative: Costs of purchases (10,000 ? $8. 0) Additional fixed costs Additional contribution margin from using the space where the chains were made to upgrade the bicycles by adding mud flaps and reflector bars, 10,000 ? ($20 – $18) Total relevant costs under the buy alternative $80,000 $82,000 16,000 (20,000) $78,000 Ace should now buy the chains from an outside vendor and use its own capacity to upgrade its own bicycles. 3. In this requirement, the decision on mud flaps and reflectors is irrelevant to t he analysis. Cost of manufacturing chains: Variable costs, ($4 + $2 + $1. 50 = $7. 50) ? 6,200 Batch costs, $200/batcha ? 8 batches Machine rent Cost of buying chains, $8. 20 ? 6,200 a $46,500 1,600 3,000 $51,100 $50,840 $2,000 ? 10 batches In this case, Ace should buy the chains from the outside vendor. 11-28 11-37 (60 min. Multiple choice; comprehensive problem on relevant costs. You may wish to assign only some of the parts. Per Unit Fixed Manufacturing costs: Direct materials Direct manufacturing labor Variable manufac. indirect costs Fixed manufac. indirect costs Marketing costs: Variable Fixed Total $1. 00 1. 20 0. 80 0. 50 $1. 50 0. 90 Variable $3. 50 $0. 50 $3. 00 2. 40 $5. 90 0. 90 $1. 40 1. 50 $4. 50 1. (b) $3. 50 Manufacturing Costs Variable $3. 00 Fixed 0. 50 Total $3. 50 2. (e) None of the above. Decrease in operating income is $16,800. Differential $1,440,000+ $ 91,200* 720,000 + 360,000 + 1,080,000+ 360,000 – 120,000 216,000 336,000 $ 24,000 New Old Revenues 24 0,000 ? $6. 0 Variable costs Manufacturing 240,000 ? $3. 00 Marketing and other 240,000 ? $1. 50 Variable product costs Contribution margin Fixed costs: Manufacturing $0. 50 ? 20,000 ? 12 mos. = Marketing and other $0. 90 ? 240,000 Fixed product costs Operating income *Incremental revenue: $5. 80 ? 24,000 Deduct price reduction $0. 20 ? 240,000 264,000 ? $5. 80 792,000 396,000 1,188,000 343,200 120,000 216,000 $ 7,200 72,000264,000 ? $3. 00 36,000264,000 ? $1. 50 108,000 16,800 –– –– –– – $ 16,800 3 $139,200 48,000 $ 91,200 3. (c) $3,500 If this order were not landed, fixed manufacturing overhead would be underallocated by $2,500, $0. 50 per unit ? 5,000 units.Therefore, taking the order increases operating income by $1,000 plus $2,500, or $3,500. 11-29 11-37 (Cont’d. ) Another way to present the same idea follows: Revenues will increase by (5,000 ? $3. 50 = $17,500) + $1,000 Costs will increase by 5,000 ? $3. 00 Fixed overhead will not change Change in operating income $18,500 15,000 – $ 3,500 Note that this answer to (3) assumes that variable marketing costs are not influenced by this contract. These 5,000 units do not displace any regular sales. 4. (a) $4,000 less ($7,500 – $3,500) Government Contract As above $3,500 Regular Channels Sales, 5,000 ? $6. 00 Increase in costs: Variable costs only: Manufacturing, 5,000 ? $3. 0 $15,000 Marketing, 5,000 ? $1. 50 7,500 Fixed costs are not affected Change in operating income 5. (b) $4. 15 $30,000 22,500 $ 7,500 Differential costs: Variable: Manufacturing Shipping Fixed: $4,000 ? 10,000 $3. 00 0. 75 $3. 75 ? 10,000 0. 40 ? 10,000 4,000 $4. 15 ? 10,000 $41,500 $37,500 Selling price to break even is $4. 15 per unit. 6. (e) $1. 50, the variable marketing costs. The other costs are past costs, and are, therefore, irrelevant. None of these. The correct answer is $3. 55. This part always gives students trouble. The short-cut solution below is followed b y a longer solution that is helpful to students. 7. (e) 11-30 11-37 (Cont’d. Short-cut solution: The highest price to be paid would be measured by those costs that could be avoided by halting production and subcontracting: Variable manufacturing costs Fixed manufacturing costs saved $60,000 ? 240,000 Marketing costs (0. 20 ? $1. 50) Total costs Longer but clearer solution: Comparative Annual Income Statement Present Difference Proposed Revenues Variable costs: Manufacturing, 240,000 ? 3. 00 Marketing and other, 240,000 ? $1. 50 Variable costs Contribution margin Fixed costs: Manufacturing Marketing and other Total fixed costs Operating income $1,440,000 720,000 360,000 1,080,000 360,000 120,000 216,000 336,000 $ 24,000 $ – +132,000 – 72,000 $1,440,000 852,000* 288,000 1,140,000 300,000 60,000 216,000 276,000 $ 24,000 $3. 00 0. 25 0. 30 $3. 55 – 60,000 $ 0 This solution is obtained by filling in the above schedule with all the known figures and working â⠂¬Å"from the bottom up† and â€Å"from the top down† to the unknown purchase figure. Maximum variable costs that can be incurred, $1,140,000 – $288,000 = maximum purchase costs, or $852,000. Divide $852,000 by 240,000 units, which yields a maximum purchase price of $3. 55. 11-31 11-38 (15 min. ) Make or buy (continuation of 11-37). The maximum price Class Company should be willing to pay is $3. 9417 per unit. Expected unit production and sales of new product must be half of the old product (1/2 ? 240,000 = 120,000) because the fixed manufacturing overhead rate for the new product is twice that of the fixed manufacturing overhead rate for the old product.Proposed Make New Old Present Product Product Total Revenues $1,440,000 $1,080,000 $1,440,000 $2,520,000 Variable (or purchase) costs: Manufacturing 720,000 600,000 946,000* 1,546,000 Marketing and other 360,000 240,000 288,000 528,000 Total variable costs 1,080,000 840,000 1,234,000 2,074,000 Contribution margin 360,000 240,000 206,000 446,000 Fixed costs: Manufacturing 120,000 120,000 120,000 Marketing and other 216,000 60,000 216,000 276,000 Total fixed costs 336,000 180,000 216,000 396,000 Operating income $ 24,000 $ 60,000 $ (10,000) $ 50,000 *This is an example of opportunity costs, whereby subcontracting at a price well above the $3. 50 current manufacturing (absorption) cost is still desirable because the old product will be displaced in manufacturing by a new product that is more profitable.Because the new product promises an operating income of $60,000 (ignoring the irrelevant problems of how fixed marketing costs may be newly reallocated between products), the old product can sustain up to a $10,000 loss and still help accomplish management's overall objectives. Maximum costs that can be incurred on the old product are $1,440,000 plus the $10,000 loss, or $1,450,000. Maximum purchase cost: $1,450,000 – ($288,000 + $216,000) = $946,000. Maximum purchase cost per unit: $946,0 00 ? 240,000 units = $3. 9417 per unit. Alternative Computation Operating income is $9. 00 – $8. 50 = $0. 50 per unit for 120,000 new units Target operating income Maximum loss allowed on old product Maximum loss per unit allowed on old product, $10,000 ? 40,000 = Selling price of old product Allowance for loss Total costs allowed per unit Continuing costs for old product other than purchase cost: Fixed manufacturing costs––all transferred to new product Variable marketing costs Fixed marketing costs Maximum purchase cost per unit $60,000 50,000 $10,000 $0. 0417 $6. 0000 0. 0417 6. 0417 $ – 1. 20 0. 90 2. 1000 $3. 9417 11-32 11-39 (30 min. ) Appendix). 1. Optimal production plan, computer manufacturer (Chapter X = Units of printers Y = Units of desktop computers Objective: Maximize total contribution margin of $200X + $100Y Constraints: For production line 1: 6X + 4Y ? 24 For production line 2: 10X ? 0 Sales of X and Y: X – Y ? 0 Negative productio n impossible: X 0 ? Y ? 0 2. Solution Exhibit 11-39 presents a graphical summary of the relationships. The sales-mix constraint here is somewhat unusual. The X – Y ? 0 line is the one going upward at a 45-degree angle from the origin. The optimal corner is the point (2, 3), 2 printers and 3 computers. The corner point where the production line 1 and production line 2 constraints meet is X = 2, Y = 3 that can be calculated by solving: 6X + 4Y = 24 (1) Production line 1 constraint 10X = 20 (2) Production line 2 constraint From (2) X = 20 ? 10 = 2 Substituting for X in (1) 6 ? 2 + 4Y = 24 4Y = 24 – 12 = 12 Y = 12 ? = 3 The corner point where the production line 2 constraint and the product-mix constraint meet is X = 2, Y = 2 that can be calculated by solving: 10X = 20 (2) Production line 2 constraint X – Y = 0 (3) Product-mix constraint From (2) X = 20 ? 10 = 2 Substituting for X in (3) Y = 2 Using the trial-and-error method: Trial 1 2 3 4 Corner (X; Y) (0; 0) (2; 2) (2; 3) (0; 6) Total Contribution Margin $ 200(0) + $100(0) = $ 0 200(2) + 100(2) = 600 200(2) + 100(3) = 700 200(0) + 100(6) = 600 The optimal solution that maximizes operating income is 2 printers and 3 computers. 11-33 11-39 (Cont’d. ) SOLUTION EXHIBIT 11-39 Graphic Solution to Find Optimal Mix, Information Technology, Inc. Product Line 1 Constraint Product Y Production in Units 6 Product Line 2