China Faces The Myriad Development Problems Of Middle Income Countries Everywhere,From Its Undeveloped Financial System And Winding Path Rule Of Law, To Its Pressing Environmental Challenges”(S. Armstrong 2016.) Discuss.
Phase 1 IP Design Impacts The Organization-How different organizational designs can impact employee behavior in a positive and productive manner
Management has heard rumors that a competitor’s redesign has made it more profitable but has also lead to morale problems. The executive team of Killer App Software has asked you to write a white paper that will inform them of the following:
How different organizational designs can impact employee behavior in a positive and productive manner
Why new organizational designs are constantly emerging as the world changes
How some of the newer organizational designs might improve the organization
The white paper should be appropriate for upper management. You should use at least 3 sources from the literature on organizational design and include both theoretical and practitioner-oriented sources.
Theoretical articles come from sources such as the Academy of Management. Trade associations and journals such as the Harvard Business Reviewoften publish practitioner articles. The paper should be clear and to the point. Make sure there are no spelling or grammatical errors. Use the APA reference guide for writing the white paper.
Microeconomics Applications-1) Scarcity/Incentives; 2) Opportunity Costs; 3) Supply and Demand; and 4) Market Equilibrium
Microeconomics Applications
Week 6 includes four (4) applications in major areas in Microeconomics: 1) Scarcity/Incentives; 2) Opportunity Costs; 3) Supply and Demand; and 4) Market Equilibrium. You must complete all four applications. The options for each application are located in the textbook.
Students will complete a draft essay for each of the applications. The drafts will be submitted for grading by the end of Week 1.
The Week 6 Assignment grading is as follows.
Applications 1, 2, 3, and 4: 9 points each
Articulation and APA: 2 points
Students will complete your Final Essay for each application as part of the Economics Assessment due by the end of Week 3. Final Assessment grading is as follows:
Applications 1, 2, 3, and 4: 27 points each
Articulation and APA: 12 points
Student Should demonstrates a complete examination with in-depth and insight of all Applications how they are determinants of demand and supply .
Text:EConomic:Principles, Applications, and TOOLS by O’Sullivan,Authur
APPLICATION 1 – SCARCITY/INCENTIVES:
Prior to completing the application, it is highly recommended that students review Chapters 1 and 2 to gain a solid foundation.
Option 1: “INCENTIVES TO BUY HYBRID VEHICLES”
APPLICATION 2: OPPORTUNITY COSTS:
Prior to completing the application, it is highly recommended that students review Chapters 1 and 2 to gain a solid foundation.
Option 1: DON’T FORGET THE COSTS OF TIME AND INVESTED FUNDS
APPLICATION 3: Law of SUPPLY AND DEMAND:
Prior to completing the application, it is highly recommended that students review Chapter 3 to gain a solid foundation.
Option 1: LAW OF SUPPLY AND WOOLYMPICS
APPLICATION 4: Market Analysis (Equilibrium)
Prior to completing the application, it is highly recommended that students review Chapters 3 and 4 to gain a solid foundation.
Option 1: Equilibrium: CHINESE DEMAND AND PECAN PRICES
Student Should demonstrates a complete examination with in-depth and insight of all Applications how they are determinants of demand and supply .
TEXT: ECONOMIC:Principles,Applications, and TOOLS by O’Sullivan,Authur
APPLICATION1 Incentives to Buy Hybrid Vehicles
APPLYING THE CONCEPTS #1: How do people respond to incentives?
Consider the incentives to buy a hybrid vehicle, which is more fuel efficient but more expensive than a gas-powered vehicle. Between 2000 and 2007, the number of hybrid vehicles increased from fewer than 10,000 vehicles to more than 340,000 vehicles. Over this period, the price of gasoline increased significantly, and the higher price of gasoline was responsible for roughly one-third of the hybrid vehicles purchased in 2007. An additional factor in hybrid purchases was a federal subsidy of up to $3,400 per hybrid vehicle. The subsidy was responsible for roughly one-fifth of the hybrid vehicles purchased in 2007. The increase in the number of hybrid vehicles decreased the emission of the greenhouse gas carbon dioxide (CO2).
How efficient is the hybrid subsidy in reducing CO2? On average, the cost of abating one ton of CO2 through the hybrid subsidy is $177. There are less costly ways to reduce CO2emissions, including building insulation, energy-efficient lighting, reforestation, and switching to electric power systems that use fuels that generate less CO2. For example, a switch from coal to natural gas in power plants reduces CO2 emissions at less than one-third the cost associated with the hybrid subsidy.
.
APPLICATION1 Don’t Forget the Costs of Time and Invested Funds
APPLYING THE CONCEPTS #1: What is the opportunity cost of running a business?
Suppose you run a lawn-cutting business and use solar-powered equipment (mower, edger, blower, truck) that you could sell tomorrow for $5,000. Instead of cutting lawns, you could work as a janitor for $300 per week. You have a savings account that pays a weekly interest rate of 0.20 percent (or $0.002 per dollar). What is your weekly cost of cutting lawns?
We can use the principle of opportunity cost to compute the cost of the lawn business. The opportunity cost of the $5,000 you have invested in the business is the $10 weekly interest you could have earned by selling the equipment and investing the $5,000 in your savings account. Adding in the opportunity cost of cutting lawns instead of earning $300 as a janitor, the weekly cost is $310. Related to Exercise 1.7 .
PPLICATION2 Law of Supply and Woolympics
APPLYING THE CONCEPTS #2: What is the law of supply?
In the 1990s, the world price of wool decreased by about 30 percent, and prices have remained relatively low since then. Based on the law of supply, we would expect the quantity of wool supplied from New Zealand and other exporters to decrease, and that’s what happened. Land formerly used to grow grass for wool-producing sheep has been converted into other uses, including dairy products, forestry, and the domestication of deer.
There have been several attempts to revive the wool industry by boosting the demand for wool and thus increasing its price. The United Nations General Assembly declared 2009 as the International Year of Natural Fibres, with the objective “to raise awareness and stimulate demand for natural fibres.” In 2012, the Federated Farmers of New Zealand proposed that sheep shearing be added to the Commonwealth Games and Olympics as a demonstration sport. The favorites for Olympic titles are the current world record holders Ivan Scott (744 sheep in 24 hours) and Kerry-Jo Te Huia (507 sheep in 24 hours). Of course, it’s not obvious that Olympic shearing would increase the demand for wool, and then there is the problem of what to do with all the sheared wool. Speed knitting? Related to Exercises 2.6 and 2.10 .
APPLICATION4 Chinese Demand and Pecan Prices
APPLYING THE CONCEPTS #4: How does a change in demand affect the equilibrium price
Between 2006 and 2009, Chinese imports of U.S. pecans increased from 9 million pounds per year to 88 million pounds. The increase in demand from China is roughly 30 percent of the total annual crop. The increase in demand was caused in part by widespread reports in the Chinese media that pecans promote brain and cardiovascular health. As a result of the increase in demand, the equilibrium price of pecans increased by about 50 percent, increasing the price of pecan pie, a holiday favorite. Related to Exercises 4.6 and 4.10 .
Civil Disobedience and Non-violence: What is your opinion of the content and the topic? For a researched argument, you would support your opinion by using supporting information from the article.
This discussion forum explores a controversial topic: Civil Disobedience. Remember that any argument asks (or perhaps challenges) us to change something about our perspective on a topic or issue. If we are asking our readers to change their perspectives, we need to be persuasive and civil. Likewise, when we are challenged by others with a different opinion, we need to keep an open mind and keep our responses persuasive and civil.
Civil Disobedience and Non-violence (refer to attached documents)
- King, M. (2009). Letter from Birmingham Jail. Letter from Birmingham Jail, 1.
- Brown, T. M., & Fee, E. (2008). Spinning for India’s Independence. American Journal Of Public Health, 98(1), 39.
- Perlin, R. (2015). Two Occupys: Dissent (00123846), 62(3), 92-100.
Be sure to address all of the following elements:
Step 1: Summarize.
Summarize the articles you picked. Write one paragraph. Identify the sources by title and author in your paragraph.
- What is the main thesis of each?
- How are they are they different and how are they similar?
Step 2: Using sources to support your argument (point of view).
Now, discuss your perspective of the topic. Support your statements by citing supportive evidence from the articles you read. Remember to use appropriate citations when you quote, paraphrase or summarize. Write one paragraph. Here are some questions you can use as a starting point for your one-paragraph discussion.
- What is your opinion of the content and the topic? For a researched argument, you would support your opinion by using supporting information from the article. Use in-text citations if you quote, summarize, or paraphrase.
- Was the article persuasive? How?
- What reaction did you have to the content of the article? Draw upon personal experience or use other sources to support your discussion.
Assignment 3: Total Rewards System Proposal-Create a brief overview of the company requirements for a total rewards system
Students, please view the “Submit a Clickable Rubric Assignment” in the Student Center.
Instructors, training on how to grade is within the Instructor Center.
Assignment 3: Total Rewards System Proposal
Due Week 6 and worth 250 points
This research-based assignment focuses on the latest available information about creating, organizing, and managing a total rewards program. Envision a service-based (insurance, telemarketing, or other) profit organization that employs 20,000 employees in 17 different countries. There are 2,000 management-level individuals who speak a variety of languages. The company employs diverse individuals who are governed by multiple regulatory environments.
Write an eight to ten (8-10) page paper in which you:
- Create a brief overview of the company requirements for a total rewards system.
- Formulate a total rewards strategy to encompass the fundamentals of compensation and the regulatory environments.
- Explain the advantages of the total rewards strategy you are proposing and how it might satisfy the employees’ needs.
- Determine the key communication components of the total rewards system.
- Indicate your strategy for devising a competitive pay structure.
- Use at least five (5) quality academic resources in this assignment. Note: Wikipedia and other Websites do not quality as academic resources.
Your assignment must follow these formatting requirements:
- Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
- Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
The specific course learning outcomes associated with this assignment are:
- Define total rewards and describe the advantages of a total rewards approach.
- Analyze an organization’s strategy, workforce, operating environment, and key stakeholders to identify critical factors in designing a total rewards strategy.
- Evaluate the elements of a total rewards communication program.
- Use technology and information resources to research issues in total rewards.
- Write clearly and concisely about total rewards using proper writing mechanics.
Analyze how conducting regular job analyses benefits employees, managers, and the organization. Describe how this type of benchmarking can strengthen an overall job analysis plan
Job Analyses” Please respond to the following:
- Analyze how conducting regular job analyses benefits employees, managers, and the organization. Describe how this type of benchmarking can strengthen an overall job analysis plan.
- Using the Sample Job Analysis, create a job description for your current or most recent position. Justify how you selected the task components of the position and the organization of the components in order of priority.
Could ISIS and Al Qaeda, Two Giants of Jihad, Unite?
Respond to the following discussions from classmates (X6) Write how you would respond to their discussions) with approximately 100 words or more each. Include a reference to each response if possible. Be thoughtful and insightful and it must demonstrate critical thinking and analysis.
1. Here is an excellent article. Do you believe this could happen:
Could ISIS and Al Qaeda, Two Giants of Jihad, Unite?
Protesters carry Al-Qaeda flags during an anti-government protest in the town of Marat Numan in Idlib province, Syria, March 11, 2016
Photo by Khalil Ashawi/Reuters
by Brian Michael JenkinsLinks to an external site.
This commentary originally appeared in the opinion section of FoxNews.comLinks to an external site..
There are both similarities and differences between Al Qaeda and the Islamic State of Iraq and the Levant (ISIL). Both are bloodthirsty terrorist organizations bent on jihad, sworn enemies of the infidel West and the United States in particular. Could they one day unite in an international jihadist merger to create an even more potent regional and global threat? It is possible.
For the moment, at least, the two groups are rivals for the mantle of jihadi supremacy and neither side’s leadership has shown much interest in a union. The situation is extremely fluid, though, so it is not inconceivable that at some point in the future, beyond the current leadership perhaps, the two organizations could become one.
Al Qaeda has morphed several times since its emergence in the 1990s and its recognition as the global leader in terror with the 9/11 attacks in 2001.
ISIL or ISIS did not emerge as an international rival to Al Qaeda until 2013. Since then, ISIS challenged Al Qaeda’s central leadership, engaged in hostilities with Al Qaeda’s affiliate in Syria, expanded its areas of control and influence in Syria and Iraq, declared the existence of an Islamic State, and received pledges of loyalty from various jihadist fronts, including factions within Al Qaeda’s affiliates in Africa and the Middle East.
Though they are rivals, there are many similarities between the two groups. Both enterprises comprise a central leadership and an array of affiliates who, while pledging their loyalty to one or the other, have their own interests, capabilities, and modus operandi. Individual fighters may also have their own agendas, and loyalties may continue to shift according to which group is perceived as dominant. In addition, both organizations appeal to self-radicalized individuals, who help the groups build their respective brands through terrorist acts carried out in other regions, including in the United States.
2. Enders, Sandler, and Gaibuiloey (2011, p. 3) defined transnational terrorism as having distinct characteristics such as that it involves more than a single country, constitutes of perpetrators that have a different nationality from its victims, concerns attacks made across international borders and against foreign diplomats, operates with sponsorship from abroad, and engages terrorist events that start in one country and end in another. The al-Qaeda greatly fits these descriptions. The group advocates Salafi jihadism and does not have its own country; rather, it is composed of Muslims from different countries (Stout, 2009). The group also has operated in different countries such as Iraq, Afghanistan, and Pakistan (Stout, 2009). Today, it continues to operate and have members in the said countries in addition to Yemen and Iran (Gerges, 2016). They’ve also made attacks by crossing international borders. The first one was in 1992 when they bombed a hotel where U.S. humanitarian troops had been staying (Windrem, 2005). In 1993, they operated their first attack on the World Trade Center; they also attempted to assassinate then the Jordanian Crown Prince Abdullah (Windrem, 2005). In October 1993, there was a clash between U.S. Special operations and Somalis in the streets of Mogadishu, Somalia that led to the death of eighteen Americans by Somali reportedly trained by al-Qaida (Windrem, 2005).
This group continues to be a serious threat to America because it still continues to exist. Zimmerman (2016) noted that they continue to the al-Qaeda continues to receive sponsors and donations. This group should not be underestimated because although the Islamic State has vast swathes of land now, they only control the population through fear and coercion. Al-Qaeda, on the other hand, doesn’t control the population, but rather, has their support (Zimmerman, 2016). Stout (2009) also noted the continued threat that this transnational terrorist group has the ability to use weapons of mass destruction and create humanitarian dystopias such as those in Iraq’s Inbar Province. Thus, they should not be ignored or underestimated in present times.
3. Boko Haram is an Islamist group that went from being a local insurgency in Nigeria to brutal militant group. The Unites States has classified the group as a terrorist group. They also fit the definition of transnational terrorists, as well.
According to the module notes on Transnational Terrorism and Johnson, B.S. (2013), several factors define what transnational terrorism is. First, it involves more than one nation. While Boko Haram is established in Nigeria, it is responsible for committing acts of violence in other African countries such as Cameroon and Chad. This also covers the defining elements that states the nationalities of the terrorists usually differ from most of the victims of the venue country and that perpetrators cross an international border to commit their attacks. (Johnson, B.S. (2013). Although Boko Haram has been active primarily on the continent of Africa, analysts have begin to recognize similarities with al-Qaeda.
I believe Boko Haram can present a serious threat to America because they are tied in with al-Qaeda and America is a sworn enemy of al-Qaeda. Also, as of 2015, communication between Boko Haram and the Islamic State were intercepted, per testimony from the director of the U.S. National Counterterrorism Center. (Sergie and Johnson, 2015). Boko Haram also bombed a UN building in 2011. Now that they are in with two of the biggest foreign threats to America, who’s to say that they won’t target an embassy next plot an attack on American soil somewhere else.
4. Kevin Johnson and Tyler Lang were arrested for the 2013 raids they conducted on Fox and Mink farms across the Midwest. They were charged under the Animal Enterprise Terrorism Act, which was passed in 1992 to protect pharmaceutical companies who did research on live animal subjects, as well as agricultural and fur companies which depend on animals for their enterprise. While they have not yet been sentenced under the AETA, and in fact, no one has successfully been sentenced for any similar crimes under the act, its constitutionality is in question. The reason for this specific industry to have such a heavy handed specific law on the books to protect it, is in my opinion, questionable at best. These two men, in releasing thousands of foxes and mink, did commit several crimes, that’s not in question. Were the crimes truly a crime of terrorism though? I would argue they were not. Their actions can and should be covered with laws already in existence. Trespassing, theft, vandalism, all of these actions they carried out can be addressed by standing laws. Why should one industry be able to label criminal activity against it as terrorism? The issue with this law, it has Constitutionality issues, as applied. It’s terrorism label, only impacts people who are exercising their free speech right, protesting the mistreatment of animals, even though they have committed other related crimes.
5. Sentencing enhancement is a means in which a prosecutor can argue that additional penalties could and should be added to a current sentence. As we saw in the video “Earth Liberation Front” (If a Tree Falls, 2011), Daniel McGowan was the subject of this situation. The justification by the government for this enhancement was that, it was an attempt by the defendant to influence government policy by intimidation or coercion.
McGowan ultimately settled on a deal where he was charged with arson and conspiracy to commit arson, this was after he learned that he would be facing a life sentence if he chose not to cooperate and serve as an informant. The deal brokered by McGowan’s lawyers stated that, he would remain “noncooperative” with the state regarding his role as an informant for their investigation and in return, he would plead guilty to arson and conspiracy to commit arson.
If the hope of the prosecutor was to increase the sentence by the terrorism enhancement, than it was ineffective in my opinion. If the prosecutions attempt was to send a message to other activist groups, that this is how the government views this type of behavior, then I believe they were successful. Since the targets of the E.L.F. were private businesses, I do not believe that there was any attempted influence of government and I did not see the necessity to brand a person as a terrorist.
6. Stanislas Meyerhoff and Kevin Tubbs received stiff prison sentences after a guilty plea in their trial regarding arsons they were a part of as members of a special-interest terrorist group known as the Family. The Family commonly used arson and vandalism as their means of trying to achieve their goals. Meyerhoff even testified that “offenses … were clearly calculated to influence the conduct of government by intimidation, coercion and retaliation” (Goldman, 2007). The definition of terrorism provided by the Department of Defense is “The calculated use of violence or threat of violence to inculcate fear; intended to coerce or to intimidate governments or societies in the pursuit of goals that are generally political, religious, or ideological” (DoD, 1999). Comparing the definition of terrorism provided by the Department of Defense and Meyerhoff’s direct statement, it is undeniable that the acts committed by Meyerhoff and the Family are acts of domestic terrorism. The sentence, while harsh, still pales in comparison to the amount of damage they caused. They are very fortunate in a sense that they planned out their attacks as carefully as they did to ensure that nobody was killed while committing those acts. Had someone been killed, they would be in a hurt locker.
It is hard to argue in the Family’s favor and claim that they did not commit acts of terrorism when one of their members provides such a detailed description of their acts and the intent behind the acts that directly corresponds to the definition of terrorism. One can only hope that others contemplating acts of terrorism against property do their homework and read up on cases like this and see just how serious these offenses are.
information system project: Compare and contrast the management information systems (MIS) in place in 2 distinctly different organizations
Complete the following for this assignment:
· Compare and contrast the management information systems (MIS) in place in 2 distinctly different organizations.
· Compare each organization’s use of information systems to help manage internal operations and to make decisions.
· Assess how these two organizations use information technology for competitive advantage.
· Appraise the individual and organizational consequences of the use of information technology, and recognize potential security breaches and computer crimes.
Present your findings in a Word document of 4-5 body pages formatted in APA style.
Submitting your assignment in APA format means, at a minimum, you will need the following:
· Title page: Remember the running head. The title should be in all capitals.
· Abstract: A summary of your paper, not an introduction. Begin writing in third-person voice.
· Body: The body of your paper begins on the page following the title page and abstract page and must be double-spaced (be careful not to triple- or quadruple-space between paragraphs). The type face should be 12-pt. Times Roman or 12-pt. Courier in regular black type. Do not use color, bold type, or italics except as required for APA-level headings and references. The deliverable length of the body of your paper for this assignment is 4-5 pages. In-body academic citations to support your decisions and analysis are required. A variety of academic sources is encouraged.
· Reference page: References that align with your in-body academic sources are listed on the final page of your paper. The references must be in APA format using appropriate spacing, hang indention, italics, and upper- and lowercase usage as appropriate for the type of resource used. Remember, the Reference Page is not a bibliography but a further listing of the abbreviated in-body citations used in the paper. Every referenced item must have a corresponding in-body citation.
Please submit your assignment.
Your assignment will be graded in accordance with the following criteria.
Individual Project Rubric
| Grading Criteria | Percentage |
| Deliverable requirements addressed; understanding of material and writer’s message and intent are clear. | 35% |
| Scholarly research which supports writer’s position properly acknowledged and cited direct quotations may not exceed 10% of the word count of the body of the assignment deliverable (excluded title page, abstract or table of contents if used, tables, exhibits, appendices, and reference page(s). Inclusion of plagiarized content will not be tolerated and may result in adverse academic consequences. | 20% |
| Critical thinking: Position is well-justified; logical flow; examples provided where appropriate. | 20% |
| Structure: Includes introduction and conclusion; proper paragraph format; reads as a polished academic paper or professional presentation, as appropriate for the required assignment deliverable. | 10% |
| Mechanical: No spelling, grammatical, or punctuation errors. | 10% |
| APA: Deliverable is cited properly according to the APA Publication Manual (6th ed.). |
ENG215 Assignment 2: Research Proposal – Thesis, Major Points, and Plan: Select a topic on which your persuasive writing paper will be focused
ENG215 Assignment 2: Research Proposal – Thesis, Major Points, and Plan
Due Week 3 and worth 120 points
Select a topic on which your persuasive writing paper will be focused.
Write a one to two (1-2) page research proposal in which you:
- Identify the topic you selected and explain two (2) reasons for using it.
- Include a defensible, relevant thesis statement in the first paragraph.
- Describe three (3) major characteristics of your audience (official position, decision-making power, current view on topic, other important characteristic).
- Describe the paper’s scope and outline the major sections.
- Identify and explain the questions to be answered.
- Explain your research plan, including the methods of researching and organizing research.
- Document at least three (3) primary sources and three (3) secondary sources. Use credible, academic sources available through Strayer University’s Resource Center. Note: Wikipedia and other Websites do not qualify as academic resources.
Your assignment must follow these formatting guidelines:
- Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; references must follow APA or school-specific format. Check with your professor for any additional instructions.
- Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required page length.
The specific course learning outcomes associated with this assignment are:
- Recognize the elements and correct use of a thesis statement.
- Write a research proposal that states the claim and scope of the research project.
- Outline the main sections of the research project.
- Devise an ordered research plan to obtain appropriate resources.
- Write clearly and concisely about selected topics using proper writing mechanics.
- Use technology and information resources to research selected issues for this course.
Click here to view the grading rubric for this assignment.
Accounting-Going Postal: Analyzing Operating Income of the Wheels of Fortune
Going Postal: Analyzing Operating Income of the Wheels of Fortune
The Decision
It was a beautiful Saturday morning as Lance completed his ride in the hill country of central Texas. During his ride Lance thought, “What has caused the operating income of Wheels of Fortune to decline so drastically over the last year?” He was concerned that if the trend persisted, Wheels of Fortune, the bicycle assembly and wholesale company he started ten years ago, would cease to exist.
From the beginning, Wheels of Fortune was Lance’s brainchild. At forty, after surviving a significant health scare, Lance realized his professional cycling career was nearing an end. Yet, he wanted to stay connected to the cycling community he so dearly loved. He reasoned his years of professional cycling experience for the Postal team and firsthand knowledge of the deficiencies in existing bicycle technology uniquely qualified him to build a better bicycle.
During a ride after another grueling season, Lance mentioned his idea for Wheels of Fortune to his long-time training partners and best friends, Tyler and Sam. “Last week, after Sheryl told me she is expecting our first child and I decided to retire.”
Tyler a bit surprised asked, “I knew you were tiring of the professional circuit, but I didn’t think you were ready to retire. What’s next for you?”
Lance replied, “I’m going to start a bicycle company called Wheels of Fortune. The company will assemble bicycles to order from retailers. I know it is sudden, but I would like for you and Sam to be my partners. With your knowledge of bicycle assembly and technology, Sam’s accounting and procurement acumen, and my sales and marketing appeal, we would form an unbeatable team just like we did on the circuit.”
The Challenge
“Who called this meeting?” a slightly annoyed Tyler queried.
“I did,” Lance replied. “My apologies, I know how much we all hate meetings, but it could not be helped. Our operating income decreased drastically in the last year. At this rate, we won’t be in business much longer if we can’t figure out what happened. I asked Sam to generate a comparison of operating income for the past two years.”
Sam explained, “Our operating income decreased over $4 million in just one year even though we sold the same number of bicycles. Over the same period, our contribution margin per bicycle decreased by almost a $1,000. While the average variable cost per bicycle decreased significantly, it was not enough to offset the decrease in our average selling price per bicycle.”
Lance interrupted, “We have always sold professional bicycles for $5,500 and Novice for $1,000. How is it possible for our average sales price to decrease so drastically in one year without a price reduction?”
Sam replied, “That’s an excellent question and I thought the same. Our accounting records show that, while we continue to produce and sell at capacity of 4,500 bicycles, our sales mix shifted drastically. In prior years, 70 percent of total sales were generated from Professional bicycles. However, this year, 70 percent of sales are coming from Novice bicycles. The demand for Professional bicycles has decreased with a corresponding for Novice models.”
“We’ve been assembling the same top-of-the-line Professional bicycle for ten years. How is it possible that sales shifted so drastically?” Tyler asked.
Sam suggested somewhat sarcastically, “Perhaps, our Professional bicycles are no longer considered top-of-the-line.”
Lance sensing Tyler was a little put off chimed in, “So you are saying the shift in sales mix is the reason for our decreased operating income?”
“You are partially correct. The shift in sales mix impacted our average selling price. However, other factors contributed to the decrease in our operating income and need to be quantified. Specifically, we need to analyze our variable manufacturing and fixed selling and general administration costs,” Sam appraised.
“Okay. So, you are suggesting we have the data to analyze those costs?” Tyler asked hopefully.
“Yes; however, analyzing our variable manufacturing costs is much more complex than analyzing sales. We need to begin by comparing our expected or standard costs to assemble a bicycle with the actual cost to calculate manufacturing variances. Analyzing manufacturing variances will provide insight about spending and the efficiency of our assembly process,” Sam explained. “When we started the company, we used the following assumptions to generate standard costs and establish selling prices.”
“So, the direct labor and variable overhead costs are the expected conversion costs to assemble the bicycle kits (direct materials) into a bicycle?” Tyler asked.
Sam replied, “Correct. You will notice the direct labor to assemble Professional bicycles is more than double Novice bicycles. Because the frames and parts are so expensive on Professional bicycles, we decided to assign our most experienced assemblers to that department. In addition, as sales of our Novice bicycles increased, we were forced to transfer idle Professional assemblers to the Novice line to keep up with demand.”
Tyler added, “This is the first I’ve seen this. I am not certain how those changes impact our direct labor costs.”
“Calculating manufacturing variances can help us determine the dollar impact of those changes and others have on our variable manufacturing costs,” Sam affirmed, “I summarized the relevant direct material, direct labor, and variable manufacturing overhead costs in this table. The table shows the actual number of bicycle kits, direct labor hours, and variable overhead costs incurred to assemble 4,500 bicycles last year.”
After reviewing the information, Tyler replied, “It appears you have been keeping track of our actual costs for some time. How come we never calculated manufacturing variances before?”
Sam responded, “There was no need. For the first nine years of Wheels of Fortune, the company consistently generated $6 million in operating income. However, now we need to analyze everything including the $150,000 in raises we gave ourselves last year.”
A concerned Lance asked Sam, “Can you analyze our operating income, so we can make changes? If the trend continues, I might need to be forced to go back to the Postal team and I’m too old and out of shape for that.”
Sam enthusiastically replied, “Absolutely.”
Case Questions: Prepare your responses to the following the case questions as if you were Sam, the accountant for Wheels of Fortune.
1. Think about your initial observations of the potential causes of the decrease in operating income from 2016 to 2017.
2. Impact on operating income: Calculate the following to quantify the impact on decrease in operating incoming from 2016 to 2017 for Wheels of Fortune.
a. Standard variable cost and contribution margin per bicycle (percent & dollars): Utilizing the standard cost components and the selling price per bicycle, calculate the standard variable cost and contribution margin per bicycle at standard.
b. Sales mix impact: Analyze the impact of the shift in sales mix by determining the sales mix variance between 2016 and 2017.
c. Manufacturing variance impact for 2017 only: Calculate the following:
i. Total direct materials cost variance (price + usage/efficiency). DM price variance = variance between standard and actual * DM used and DM efficiency = excess used * standard cost
ii. Total direct labor (rate & efficiency). DL rate = variance in rate * actual DL hours and DL efficiency = DL std. rate * DL hours variance * # of bikes produced
iii. Total variable overhead variance = OH variance between std. & actual * # of bikes
d. Selling and general administration impact: Calculate and analyze the increase in selling and administration costs on Wheels of Fortune 2017 operating income.
e. Operating income reconciliation: Utilizing the operating income reconciliation from 2016 to 2017, check your calculations from items b-d above for accuracy before completing #2.
3. Recommendations: Based on your financial analysis, generate a professional memo to the partners with your short (less than a year) and long-term (up to five years) recommendations on how to improve the company’s operating income integrating information from the schedules you created. A reader with limited financial expertise (e.g. Lance) should be able to comprehend your analysis and associated recommendations.
Table TN-1: Comparative operating income statement
Table TN-2: Summary of standard costs
Table TN-3: Summary of 2017 actual costs
3
2017
Bicycle Kit:
Used1,400
Price per kit3,200$
Direct labor hours15,525
Direct labor rate per hour44$
Variable overhead per bicycle180$
2017
Bicycle Kit:
Used3,200
Price per kit690$
Direct labor hours20,790
Direct labor rate per hour38$
Variable overhead per bicycle65$
Wheels of Fortune
Summary of Actual Costs
Professional
Novice
Difference
Operating Income 20165,757,000$
Total Sales Mix Variance (from 2b)(3,204,000)
Manufacturing Variances:
Direct Materials Variance (from 2c)
Price(568,000)$
Efficiency(180,000)
Direct Labor Variance (from 2c)
Rate(228,420)
Efficiency(137,700)
Variable Overhead Variance (from 2c)
Spending(87,750)
Total Manufacturing Variances(1,201,870)$
Selling & General Administration (from 2d)(150,000)
Operating Income 20171,201,130$
Wheels of Fortune
Income Reconciliation
2016 to 2017
ProfessionalNovice
3,000$ 600$
10 6
40$ 30$
150$ 50$
Summary of Standard Costs
Wheels of Fortune
Summary of Standard Costs
Bicycle Kit per unit
Direct labor hours per bicycle
Variable overhead rate per bicycle
Direct labor rate per hour
