: Ethics and the Manager; Shut Down or Continue Operations
Marvin Braun had just been appointed vice president of the Great Basin Region of the Financial Services Corporation (FSC). The company provides check processing services for small banks. The banks send checks presented for deposit or payment to FSC, which then records the data on each check in a computerized database. FSC sends the data electronically to the nearest Federal Reserve Bank check-clearing center where the appropriate transfers of funds are made between banks. The Great Basin Region consists of three check processing centers in Eastern Idaho—Pocatello, Idaho Falls, and Ashton. Prior to his promotion to vice president, Mr. Braun had been manager of a check processing
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*Regional administrative expenses are allocated to the check processing centers based on revenues.
*Corporate administrative expenses represent a standard 8 charge against revenues.
Upon seeing this report. Mr. Braun summoned Lance Whiting for an explanation.
Braun: What's the story on Ashton? It didn't have a loss the previous year, did it?
Whiting: No, the Ashton facility has had a nice profit every year since it was opened six years ago. But Ashton lost a big contract this year.
Braun: Why?
Whiting: One of our national competitors entered the local market and bid very aggressively on the contract. We couldn't afford to meet the bid. Ashton’s costs--particularly their facility expenses--are just too high. When Ashton lost the contract, we had to lay off a lot of employees, but we could not reduce the fixed costs of the Ashton facility.
Braun: Why is Ashton's facility expense so high? It-s a smaller facility than either Pocatello or Idaho Falls and yet its facility expense is higher.
Whiting: The problem is that we are able to rent suitable facilities very cheaply at Pocatello and Idaho Falls. No such facilities were available at Ashton, so we had them built. Unfortunately, there were big cost overruns. The
There were several obstacles that had the potential to impact the scope, time, and the cost of the PWP. According to Schwalbe (2011), “Managing the triple constraint involves making trade-offs between scope, time, and cost goals for a project” (p. 8). The PWP required over 400 owner-acquired and overseeing permits. Any delay in obtaining a permit would cause the time schedule to slip. This massive project required
Reasons for Choosing Facility: I chose this facility because it’s close to where I live and part of a large, we respected, faith based health system serving South Central Texas. I wanted to explore its competitive strategy and see how it compared to others competing for the same patient pool.
According to the fact of this case, Parent Co. (Parent) wholly owns Poor Son Co. (Poor Son) as a legal subsidiary, and both of them all nonpublic companies. However, in January 2007 Poor Son filed a voluntary bankruptcy under Chapter 11 of the U.S. bankruptcy code because of its inability of meet obligations as they became due. Then, Parent claimed the loss of control of Poor Son and deconsolidated Poor Son from its financial statement. Through the bidding process in May 2009, Poor Son and OtherCo, the winning sponsor, filed a joint plan of reorganization to the bankruptcy court, but the plan was rescinded by OtherCo later due to significant market value shrink of Poor Son. After that, the
You may omit explanations of the transactions. Skip a line between eah set of journal entries.
As expected the response from the board was a mix one. Some thought the $25,000 per month bill was rather steep and thought this would drive the facility into more debt, the others thought the stock option was outrageous and were very unhappy. Lloyd Lewis was most unhappy because TM, Inc. did not report to him and the consultant firm was also going to find his replacement.
The net present value (NPV) of each option has been calculated and included in Table 1, based on figures from the study group report. Unfortunately, these figures are flawed in the same manner as Wriston’s current performance and accounting mechanisms in that they don’t properly allocate revenue, nor do they recognize inherent manufacturing complexities. The plant closure option’s expected operational gain seems particularly suspect. A better valuation of the new plant options is perhaps
Nevertheless, cost estimates were about 5 million, with almost all the investment in the first 12 months. Such investment would have been in contrast with the CEO’s and EVP’s guidelines and would have been very difficult considering the condition of the balance sheet, as Clayton lost 24.2 million in the last six months, with the only Clayton SpA loosing 6.7 million. Overmore, the company is currently losing more than 1 million per month as a consequence of a 27% increase in steel prices in the past two years. A a cost that would still affect the company by choosing this option and that could not be recouped due to foreign competitors’ aggressive pricing. In this sense it will be very difficult to compete with Asian low prices because both of the initial 5 million investment and the higher manufacturing costs. Hence, Clayton SpA is not going to develop a new product line able to acquire new market share in the post-recession profitable growth, it will be almost impossible to achieve the “top four in four” plan and to increase the low percentage (7%) of the overall market share, as compressor chillers have generated in 2009 only the 12% of sales for the rest of Europe. Finally this option would imply a greater layoff , counteracting the FILM, unions and local laws and affecting the company’s political relationship. However it would be very difficult to achieve a downsizing owing to
The actual cost of production was better than budgeted falling by 1.91% to $ 51,007 from $ 52,000. This is a superb achievement but further analysis shows some troubling over runs in costs and quantities consumed.
Accounting professionals are in very high demand. The nature of work in accounting is so vast an individual would have so many different areas of accounting to choose from. Accounting requires people who can work with complex business structures, computer systems, and financial analysis packages. Accounting work further requires an aptitude for mathematics and the ability to compare and analyze accounting data quickly. Accountants also need to have strong communication skills as they must effectively communicate accounting data to their employers and/or clients. The accounting profession also demands a high level of integrity and morality because the financial data prepared by accountants is used by business managers to run their
Haley Romeros had just been appointed vice president of the Rocky Mountain Region of the Bank Services Corporation (BSC). The company provides check processing services for small banks. The banks send checks presented for deposit or payment to BSC, which records the data on each check in a computerized database. BSC then sends the data electronically to the nearest Federal Reserve Bank check-clearing center where the appropriate transfers of funds are made between banks. The Rocky Mountain Region has three check processing centers, which are located in Billings, Montana; Great Falls, Montana; and Clayton, Idaho. Prior to her promotion to vice president, Ms. Romeros had been the manager of a check processing center in New Jersey.
The accounting system we use today started in Venice in renaissance period over 520 years ago. The trade business increased hugely during this time and all the financial recordings had to be written down to help people see how their business is doing. During that time in 1494 the first book about was published in accounting by Luca Paciolli and was called “The Collected Knowledge of Arithmetic, Geometry, Proportion and Proportionality”. He was called “The father of Accounting” and most of his described principles have been used up until this day.
class he had missed had been devoted to a lecture and discussion of the statement of cash flows, and
Management in business and human organization activity, in simple terms means the act of getting people together to accomplish desired goals. Management comprises planning, organizing, ->resourcing, leading or directing, and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal. Resourcing encompasses the deployment and manipulation of human resources, financial resources, technological resources, and natural resources.
In this composition, we will be discussing two topics that go hand in hand when it is dealt with in tax accounting. To fully understand the scope of this article, passive activity is defined by the IRS as “any rental activity or any business in which the taxpayer gains income but does not materially participate in the activity”(IRS). Examples of passive activities can include equipment leasing and real estate leasing, in contrast to salaries, wages which are generally considered non-passive activities. As the article “Skip the dorm, buy your kid a condo” states, there are tax benefits when renting a property, but now individuals have exploited loopholes in the tax code that can be controversial and even illegal.
Figure 14 shows that the majority of expenditure was used on their animal and botanical collection, whether it be attainment of new residents, new enclosures or development on present enclosure costing £5.3million. 2016’s financial report stated that refurbishment to roads surrounding CZ took place, and multiple refurbishments of present buildings took place adding and investing in energy saving technology. The total expenditure in 2016 was £35,899,000 which increased