Based on volume output the best option to cost-effectively manufacture the Samba Sneakers would be to buy New Equipment with fixed cost of $200,000, variable cost of $500 for every 1,000 sneaker. -Buying new equipment has the lowest cost option for a volume over 300 sneakers manufactured. The breakeven points for each option are as follows: BREAKEVEN POINTS Units Dollars Reconditioned vs. New Equipment 300 350000 Reconditioned vs. Outsource 25 75000 New Equipment vs. Outsource 80 240000 However, buying New Equipment has the lowest cost according to the graph for volumes over 300 sneakers. (See Graph) A1. A1a.
Compared to Macy’s who keep an item in inventory for 119 days, Nordstrom keeps its items in inventory for 62 days. Other than relying on day-to-day sales, Nordstrom only discounts certain items and plans for more profitable and productive sale prices. Nordstrom benchmarks to assess the success of their web-based inventor system by discovering what other organizations are doing to succeed and incorporate those ideas into their own operations. Competition for Nordstrom will be intense against Banana Republic, Macy's, and Nike; big shoe selling companies but if they take certain qualities from each one and intertwine them with their own, their web-based inventory will be a great success. Participatory planning includes the people who will be affected by plans and who will be asked to implement them.
The primary customers of KR+H cabinetry are those who want to optimize the amount of useable space in their homes that stock cabinets cannot provide. The industry in 1992 was comprised of 61% stock cabinetry, and custom cabinets similar to those produced by KR+H comprised of only 20%. This is down from 26% in 1989 resultant from poor economic conditions between 1989 and 1992. KR+H uses a direct sale to consumer approach that only accounted for 2% of total industry sales. Industry sales by use of cabinet dealers and distributors contributed for 31% and 30% respectively.
• Creative partnerships – by signing exclusive contracts with their suppliers that allows the suppliers to carry most of the financial burden associated with Blue Nile’s customer transactions, the company is able to contribute to their profitability. Blue Nile’s creative contracts allows them to hold on to cash for an average of 80 days from customer transactions before paying their suppliers. This also allows Blue Nile to carry very little inventory of its own, relying on their suppliers to hold their inventory until a sale occurs. • Eliminating the middle-man – by eliminating the traditional brokers and wholesalers and buying directly from the suppliers, Blue Nile also eliminated layers of costs normally associated with jewelry purchases, while allowing them to keep a larger portion for themselves, adding to their profit again. By keeping their overhead costs low through their online presence and creative partnerships, along with purchasing directly from their exclusive suppliers, Blue Nile’s business model was a “diamond in the rough” when the company began.
Should Mr. Jones purchase the stock of Smith outright, leaving Smithon intact? What about issuing debt in his Johnson Services company to pay for the Smith company – would that raise debt to equity issues? A: A straight purchase of Smithon is the simplest transaction, and probably the lease costly in terms of administrative matters. Purchasing Smithon with debt could raise debt issues with Johnson, if the Johnson's current cash flow is insufficient to meet the debt service requirements to bond purchasers. Should Mr. Jones convert Smithon to an S corporation and change the fiscal year end to a calendar year end?
Memo To: Chip & Charles Carroway, Carroway Clothing Limited (CCL) From: Date: Re: Current accounting issues, employment benefits and financing options. Thank you for the opportunity to address the current accounting issues, employment benefits and financing options facing Carroway Clothing Limited (CCL) 1. SR& ED and Development costs treatment: In reviewing the financial statements it appears that the development costs and SR&ED treatment may not have been recorded appropriately. The SR&ED are tax credits to be used towards taxable income and should not have been recorded as government grants. Since CCL may not have needed them in the initial years, it can use SR&ED tax credits against taxable income
This estimate also is conservative because the cost of new equipment was not included in total assets. Assumed WACC Assumed tax rate 15% 35% Assumed total assets (no change) Assumed current liabilities Capital charge (.15 x $4,000,000) EVA (given) $ 4,000,000 0 600,000 (120,000) Actual 480,000 Required Operating income after tax, $600,000 – 120,000,
The Keynesian economists actually explain the determinants of saving, consumption, investment, and production differently than the classical economists. Classical economists believe that the best monetary policy during a crisis is no monetary policy. The Keynesian theorists on the other hand, believe that Government intervention in the form of monetary and fiscal policies is an absolute must to keep the economy running smoothly. In addition, Classical economists believed in the long run and aimed to provide long run solutions at short run losses. Keynes was completely opposed to this, and believed that it is the short run that should be targeted first.
Thus, when comparing with other same level competitors like Adidas and PUMA, NIKE;s football jerseys has an advantage in lower price. Weakness: As it’s mentioned on strength, Nike has no factories by its own, it leads to the lack of quality at some level. We found in the survey, Users said that the jersey had poor durability, it could be torn easily. The organization does have a diversified range of sports products. However, the income of the business is still heavily dependent upon its share of the footwear market.
Our analysis on producing velvet shirts did validate Ted’s argument. The contribution margin of the velvet shirts are $22.00 and the demand is 6,000, which yields a total profit of $132,000. This being less than the fix costs of velvet During our analysis we found that simplifying the programming models into several manageable sections allowed us to address the independent production processes. Our teams determine the following contribution in margins in appendix A by taking the difference of the total revenues and variable costs. Our team separated the silk blouse and camisole since they’re the only two produces requiring silk; additionally we applied a similar approach for cotton skirts and sweaters.