Butler Lumber Company

Use the adjustment rates in Exhibit 6 to calculate the profit of the Gradefes and Madrid-Barrio de Salamanca branches, according to the procedure described in the profitability analysis section of the case.

In the same way should be treated cost of $1 million related to dismantlement of the existing manufacturing operation. According to the ASC 420-10-24-14, this cost

The equipment is expected to cost $240,000 with a 12-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 96,000 units of the equipment’s product each year. The expected annual income related to this equipment follows.

One assumption that should be clearly analyzed is that the collection period is of 30 days net. Not always customers have the ability and willingness to pay off their debts in 30 days, some may take more time, and some could incur in bad debt.

The reason why Butler Lumber Co. is considering finding a different line of credit is because they’ve nearly exhausted all their usable credit with Suburban National Bank, using up $247,000 of the $250,000 of the credit limit. To compile this issue, the bank is wishing to secure the loan with some of Butler’s property. Considering the company’s large debt ratios, they have decided to check with Northrop National Bank’s offer to extend their line of credit by $215,000.

After talking to the supplier and meeting with your Engineers and Financial Analysts, you’ve gathered the following pieces of data:

Austin Wood Products should also define their organizational structure more clearly in terms of its centralization, functions and duties especially in terms of the production department. Where in the purchasing agent reports to the VP of Finance, but it is supposedly under production since it is highly involved in this.

Mr. Aly Tapily is working as a Material Data Analyst. Under the supervision of the MPR Control Manager he is tasked to provide manager services per assigned work by Industrial Engineering Manager and Supply Chain Manager. Aly’s primary function in this position is to analyze and monitor the quality of data from Engineering and Industrial documents during product manufacturing by analyzing data collected to find discrepancies. To successfully complete this task, he needs to have an ability to read and understand engineering drawings/schematics, a good understanding of electrical and mechanical components needing in production, and good statistical analysis skills. Aly is also responsible for extracting required data from the company’s database and ERP system or other systems used for Bill of Materials (BOM) and procurement. He then has to report findings in clear concise format to project managers for resolution. These duties among others, while working on the different projects, will help Aly’s knowledge of different engineering procedures taking during product manufacturing, process analysis and control, project management, database technology, data reporting skills, and statistical skills learned through his engineering degree.

This bank loan helped finance the increase in property and other related assets. The sponaneous assets that were increased as a result of an increase in sales were financed by an increase in sponaneous liabilities. Spontaneous liabilities have grown by 35%, which supports the claim that they finance the increase in accounts receivable and inventories. In the period between 1993-1995, the financial strength of Clarkson Lumber has deteriorated significantly. As seen from the financial ratios excel spreadsheet attached, the current and quick ratios have been gone down substantially. This means that the company’s ability to meet its short term obligations has deteriorated. Furthermore, the return on sales and return on assets have also gone down, which means that their increase in net income has not stayed consistent with the increase in sales and increase in assets to finance these sales. Their falling inventory turnover ratio means that even though their sales are increasing, they are not moving inventory at the same pace they had before. Their low accounts receivable turnover ratio and high dales sales outstanding indicates that there’s a large amount of money tied in this account.

In order to meet both of Northcutt’s objectives of reducing inventory and increasing service levels, Northcutt should implement a continuous review system to manage inventory. Based on the calculations provided in question 2 of the appendix, managers at Northcutt will need to set the reorder point for part FB378 at 118 units and 296 units for part GS131 for the

In December 2006, Bob Prescott, the controller for the Blue Ridge Mill, was considering the addition of a new on-site longwood woodyard. Two primary benefits for this new addition include eliminating the need to purchase shortwood from an outside supplier and creating an opportunity to sell shortwood on the open market. Also, the new woodward would reduce operating costs and increase revenues. Blue Ridge Mill currently purchased

Q5: What is the total unit cost and per unit profit for 1 kg of "complete male" at a retail price of Cr. 6,85 and with an allocation of cr. 1.20 for production fixed expenses?

Options: The Butler Lumber Company (BLC) could obtain from Suburban National Bank maximum loan of $250,000 in which his property would be used to secure the loan.  Northrop National Bank is considering BLC a line of credit (LOC) of up to $465,000.  BLC would have to sever ties with Suburban National if they were to have this LOC extended to them.

DO YOU AGREE WITH MR. WILSON 'S ESTIMATE OF THE COMPANY 'S LOAN REQUIREMENTS? HOW MUCH WILL HE NEED TO FINANCE THE EXPECTED EXPANSION IN SALES TO $ 5.5 MILLION IN 2006 AND TO TAKE ALL TRADE DISCOUNTS?

As Mr. Clarkson's financial advisor, we would caution him on expanding his business given the current financial trends and ratios of the company. The investment in inventory and receivables is too high. As a result, Clarkson Lumber's return on assets, return on equity and invested capital are lower when compared to other high profit outlets as shown in exhibit C. Additionally, a significant increase in debt, such as a $750,000 loan, will further reduce the current ratio of the company. Clarkson Lumber could benefit from some changes in its collection policies for