Abbington Youth Center
1. Abbington Youth Center is a not-for-profit organization, which provides three high-quality programs: Infants and Toddlers Program, Preschool Program, and After-School Program. Targets are children up to three-years old, three to five-years old, and five to seven-years old. 2. Mark Thomas, assistant director of the Abbington Youth Center, instructs the program directors with his breakeven analysis. He calculated the following results by using average method: * Each student contributed $4,348 to fixed costs
* 115 students are the breakeven point
3. The current Abbington’s programs enrollment is exactly at breakeven, so Mr. Thomas encourages the program directors to expand the size of their programs to increase margin. However, they come up with three concerns about expanding programs: - Infants and Toddlers Program has reached its current maximum capacity of 50 students - Preschool Program could add another 10 students, but would need to hire another teacher, at a cost of $22,000. - After-School Program could add another 15 students, but this also needs another teacher, at a cost of $25,000. 4. Also, the center’s director hopes to have some extra money for painting and some renovations by charging more per-student fees. A 10000 dollars is needed during the year. Issues
1. Should Mr. Thomas use averages when the Center has three separate programs? 2. Should the teachers be considered a fixed or a variable cost? 3. What’s the new breakeven point if we consider an increase in supplies’ price, expected renovations expense, and extra teachers’ salaries? 4. Should the program charge more fees on each student?
5. Ms. Fineberg is considering eliminating the After School Program. Is it a right decision? Breakeven Analysis
Table 1: Breakeven point for each of the three programs using Exhibit 1 | Infants and Toddlers| Preschool| After-School|
Fee per student| $4,520|...
The SqueakyHorn |
Assignment A |
The SqueakyHorn is a musical instrument repair store which specialized in all major and minor repairs for band and orchestra instruments. Over the past ten year, The SqueakyHorn has established a great customer relationship with the music professionals from all over the country, and has been operated in a relatively less competitive environment as there were no many similar stores in the town. However, as the new store Best Instrument Repair opened across the town recently, the SqueakyHorn faced a lot pressure on lowering the price for minor repairs in competing with the new price that the Best Instrument Repair offers for the similar services.
Eugene Decker, one of the three owners of The SqueakyHorn, was trying to figure out the reason for losing $50745 in their planned profit from the actual operating results, with the information that the store has been going through significant changes within the year. In order to explain the change in profit, it is necessary to have a good understanding of the musical instrument repair industry from both macroeconomic and microeconomic aspects first.
Canadian GDP has been showing an increase trend from 2001 to 2010 as showed in Appendix 1, even though between 2008 and 2009, GDP had a...
...For the SqueakyHorn Company, it faces with decreases in profitability. To solve this problem, the company has two alternatives.
Alternative 1: Status Quo
Alternative 2: Charge minor band repairs on a flat-fee basis and pay the band repairers on per-job basis and charge delivery fees.
The company can choose to stick to its original costing system and make no changes to the current business model.
Under the original system, both owners and employees are familiar with the current status and can work comfortably as usual. The service quality would stay the same and the original customers are also familiar with the company’s service and pricing system and could remain loyal to the company. Moreover, the current costing system and pricing system are consistent with the market niche strategy. Although there is a decrease in profitability, the company is still profitable and there is no risk of losing profits or customers since there are no changes.
The current costing system has some loopholes that result in the lack of efficiency, which in turn leads to the decline in profits. Since the company pays the employees as it planned, there would be zero labor rate variance. The only existing variance that leads to the difference between planned budget and actual budget is labor efficiency...
... CASE ANALYSIS
Meagal Stelplast (MSL) factory manufactured automobile horns in Delhi for the replacement market. It produced around 15000 horns per month, out of which only 20% were branded as “MSL” and the rest was branded for others. The working principle of horns is similar to electric door bell consisting of diaphragm and copper wire as the key components and assembling the components forms the critical process.
The company was not registered with Bureau of Indian standards IS -1884-1993, nor certified for ISO-9001-2000 and Automotive Research Association of India (ARAI)
2.0 BILL OF MATERIAL
There are 3 types of items in BOM:
• Component items:- 31 types which all needs to be procured (Buy Type- Independent item)
• Assembly items:- 3 types of which 1 needs to be procured (Buy Type- Independent item) and 2 are Make Type (Dependent item )
• Final Product:- 1 which is Make Type (Dependent item )
Buy type items needs capital requirement and become a source of inventory whereas Make type items face bottleneck issues that are
A closer look at the BOM for a horn of Classic Hero Honda model of 90 dia illustrates 36 parts including the finished product i.e. Horn Hero Honda classic 90 dia. All the items in the BOM can be sub-divided into 4 groups namely
• Nuts & Bolts
3.0 PRODUCT PROCESS MATRIX
MSL horns produce...
...As part owner of the SqueakyHorn, a musical-instrument repair shop, Decker was responsible for setting the charges for
various types of repairs. A potential customer had just called to inquire about the cost to repair
the bridge on her cello. After Decker quoted an estimated price for the job, the woman had
remarked, “Thank you for the quote, but I’ll be going to Best Instrument Repair. I’ve heard they
give good service, and their prices are lower than yours.” Unfortunately, Decker had heard
similar statements many times during the past few months. Ever since Best Instrument Repair
had opened across town, Decker and his partners had found themselves having to compete for
business more than ever before. To attract repair jobs and avoid layoffs, Decker and his partners
had lowered prices for minor repairs for the first time in 10 years. Decker looked at the budgeted
versus actual operating-profit statement on his desk (Exhibit 1). How could he tell what portion
of the company’s lost profits was due to the price decreases and how much was related to other
The SqueakyHorn was a musical-instrument repair shop that specialized in the repair and
restoration of band and orchestral instruments. The shop was owned and managed by Decker
and two partners, who were all well regarded for their exacting repair work and attention to
detail. Professional musicians from all over the country sent...
...registered at the Ministry of Justice practice (particularly in Vietnams Ministry of Finance). Socially independent auditors have no common interests, no relationship with the audited firm. The work of independent external auditor Check the legality and validity of the documents, accounting data, the execution of policies, accounting practices, financial statement. Check and confirm the level of honesty and reasonableness of the financial statement by the accounting units created. Check and confirm the value of the equity of the joint venture parties, shareholders, verify the truthfulness, accuracy and completeness of the accounting data and financial statement of joint venture, dissolution, merger, split, equitization, bankruptcy and other cases prescribed by law. Assess finance, accounting and consulting services to financial management, accounting and tax at the request of customers The role of independent external auditor Financial statements are used for a variety of purposes and decisions. For example, financial statements are used by owners to evaluate managements stewardship, by investors for making decisions about whether to buy or sell securities, by credit rating services for making decisions about credit worthiness of entities, and by bankers for making decisions about whether to lend money. And the auditors responsibility is to express an opinion on whether management has fairly presented the information in the financial statements. In an...
Introduction and History of SUA
Audi barely survived its sudden-acceleration problem in the 1980s, When about 1,000 Audi 5000 owner said their cars were suddenly accelerating. Audi would issue five recalls on the cars before it and the National Highway Safety Traffic Administration (NHSTA) were able to conclude that it was driver error, the accidental placement of the foot on the accelerator instead of the brake. However, there were dissenters among the causation teams. The dissenters felt that there was indeed a problem with sudden unintended acceleration (SUA) that could be solved only with the installation of a shift-interlock system, something the NHTSA was not willing to mandate on the basis of the Audi or isolated SUA cases that followed. However, SUA would reemerge in 2007 as another auto maker, Toyota experience the mysterious phenomenon.
Toyota’s Issues Begin
The Audi SUA problem unfolded quickly and furiously and quite nearly destroyed a brand. The problems with Toyota’s cars and sudden acceleration progressed like a slow simmer of soup on a stove, One bubble would pop up, but then there was quite. For example, in 2007, Bulent and Anne Ezal drove their 2005 Toyota Camry to the Pelican Beach Restaurant in Pismo Beach, California. The restaurant is on a cliff that overlooks the Pacific Ocean. Mr. Ezal was applying the brakes as he drove the car down the steep grade to its parking lot below. When he stopped after finding a parking...
... Should the Air Comfort Division institute the 5% price reduction on its air-conditioner units even if it cannot acquire the compressors internally for $50 each? Support your conclusion with appropriate calculations.
# of units= $6,000,000/$400=15,000 units+2,400 units=17,400 units
Before 5% Reduction After 5% Reduction
Per Unit Total Per Unit Total
Sales Revenue $ 400 $ 6,000 $ 380* $ 6,612*
COGS: Compressor 70 1,050 70 1,218
Other Direct Material 37 555 37 643.80
Direct Labor 30 450 30 522
Variable Overhead 45 675 45 783
Total COGS 182 2,730 182 3,166.80
Variable Selling 18 270 18 3,13.20
Total Variable Costs 164 3,000 200 3,480
Contribution Margin $ 236 $ 3,000 $ 180 $ 3,132
*in thousands of dollars
*$400 x 95%= $380
*$380 x 17,500 u= $6,612
Air Comfort Division should institute the 5% price reduction on its air-conditioner units since the effect of this reduction would increase an additional of $132,000 ($3,132,000-$3,000,000) to its Income before tax. The additional profit is caused by a sale increase of $432,000 ($180 x 2,400) in the contribution margin and a loss in contribution margin on original volume arising from decrease in selling price of $300,000 ($20 x 15,000).
Independently of your answer to requirement (1), assume the Air Comfort Division needs 17,400 units. Should the Compressor Division be willing to supply the compressor units for $50 each? Support...
...The Shepherd’s Horn is a tale of hidden love, acceptance and forgiveness. Carl, our narrator begins his journey in the breathtaking valleys of Norway. As he travels down the Norwegian mountain lands he familiarizes himself with the deep tones of a shepherd’s horn sounding in the distance.
Upon entering a valley he was warmly welcomed by his host, Thord, a broad-shouldered man with a lovely face. Thord led Carl to his home for a warm supper and nights rest. Through their conversation Carl came to discover that Thord, was a descendent of Harold Fairair and his lineage had remained unmixed.
After a long night Carl was left to sleep. In the middle of the night, songs, now so close and audible, of the shepherd’s horns, awoke him. He ran to the window and listen hearing one horn call “How is Litan,” and the other distantly answer, “Litan is fine”. Carl’s curiosity allowed him no more sleep as he anxiously awaited an explanation of this mystery from Thord.
When Thord appeared the next morning, as Ragnhild his daughter prepared breakfast, Carl jumped to ask him about the mystery horn. No sooner had the words left his mouth, he regretted them. Ragnhild shot him a pleading glance and turned as pale as could be. To Carl’s relief, Thord said he had not heard anything meanwhile Ragnhild snuck out unsteadily, giving him a painful glance.
Carl’s driver arrived shortly. For the next eight days the moment...