Case 20-3 Cotter Company, Inc.

In: Business and Management

Submitted By Bgerwick
Words 636
Pages 3
Case 20-3 Cotter Company, Inc.
Acctg 835
Advanced Managerial Accounting
Powercat Consulting Group
Group 2
Blake Gerwick, Jing Yu, Jake Norby
March 4, 2013

General Overview: During preparation of the annual budget, the management of Cotter Company has realized that the company has seasonal sales fluctuations. Currently the costs of operation include prime costs (which are labor and material costs that vary with quantity of production), production overhead costs (which include both fixed and variable elements), and selling and general expenses costs. Of the total production overhead budget it is estimated that the variable costs are equal to 25% of the prime costs. Projections for the month of January showed that the company should produce a profit of $20,000. However sales goals were not met and production was also cut back. Due to these two factors the company experienced a loss of $7,000 for January which perplexed the company president, Sam Cotter. Our firm has been contracted to analyze the situation so that Cotter Company has a better understanding of how their production and sales levels affect their bottom line.

Questions and Solutions: 1. The first determining factor in the loss for January is that the company missed sales projections by $60,000 which is 30% below planned sales volume. Secondly, the company experienced a $3,500 unfavorable prime cost variance along with a $12,500 unfavorable volume variance. The volume variance can be attributed to the fact that production volume was cut back. The prime cost variance could be due to either inefficient labor and/or material usage or spending more than planned for materials.

2. From our calculations, Cotter should expect to earn exactly zero profit it the monthly volume level is 155,556 units. That is with the assumptions that the selling price is $1 per unit and that there are no…...

Similar Documents

Case 3 B&L Inc.

...   November  3,  2011         MGMT  3624  -­‐  Case  3:    B&L  Inc.     Assignment   1) What  do  you  think  of  the  quote  from  Mayes?     • How  would  you  respond?     • What  information  would  you  request?   2) Can  Brian  Wilson  use  the  EOQ  formula  here  to  establish  the  lot  size?     • Do  all  of  the  EOQ  assumptions  hold  here?   3) Do  you  think  B&L  should  outsource  the  bracket?     • Why  or  why  not?   4) What  would  you  say  to  the  plant  manager?   5) Is  the  cost  savings  sufficient  enough  to  move  the  business  to  Mayes?   Assume  that  you  were  in  the  position  of  Brian  Wilson:   What  would  be  your  analysis  of  the  opportunity  to  outsource  the  outrigger   bracket?   B. If  B&L  was  to  outsource  the  outrigger  bracket  to  Mayes,  what  lot  sizes  would   you  specify  and  why?  (Note:  You  must  address  this  question,  regardless  of   your  response  to  Question  A.)   A.     MGMT  3624  Case  3:    B&L  Inc.     ......

Words: 3917 - Pages: 16

Oil Company Inc

...Oil Company Inc Inc. Issue: Determining whether various events require the recording of a loss provision or expense accrual on Oil Company Inc Inc's year-end financial statements. Brief Background: Oil Company Inc Inc. operates in the oil industry and its operations sometimes result in soil contamination. Oil Company Inc Inc.'s policy is to clean up any contamination that it causes. New government regulations require Oil Company Inc Inc. to perform certain actions to be in compliance with these regulations. Issues: 1. Should Oil Company Inc Inc. record a loss provision for operations in a country in which no legislation exists related to contamination cleanup as of the financial statement date but is expected to be enacted shortly after year-end? 2. Should Oil Company Inc Inc record a loss provision related to contaminated soil in a country that has no environmental legislation? 3. Should Oil Company Inc Inc. record a loss provision for changes to the income tax system that requires it to retrain a large portion of its sales and administrative staff? 4. Should Oil Company Inc Inc. record an expense related to new legislation that requires that smoke filters be installed in its factories even though the filters are not required to be installed until six months after the financial statement date? Summary Conclusion on Issues 1. Since there is no current legislation requiring Oil Company Inc Inc. to clean up contaminated......

Words: 1228 - Pages: 5

Flare Fragrances Company, Inc. Case Analysis

...Flare Fragrances Company, Inc. Case Analysis ​Since 1955, Flare Fragrance Co. has grown to be the No. 4 player in the U.S. women’s fragrances market and generated $221 million in factory sales in 2008. The economic crisis had taken its toll on Flare over the past few years. The CEO wants to finalize Flare’s 2009 strategic initiatives and is looking at options that will offer the greatest potential for growth. Flare’s goal it to pursue an option that will allow the company to gain at least $7.5 million in incremental revenue in 2009 and reverse the declining sales trend caused by the recession. ​To make a justified recommendation for Flare, an analysis of the advantages and disadvantages of the company’s options are reviewed in Figure 1. Figure 1 Option 1: Advance in drugstore channel Advantages Disadvantages • Considered a great prospect market in the future • Market trends should decline in sales through high-end department stores and mass channels • Reorganized chain drugstore sales team with experience • Redesigned stores will attract younger women • Drug chains are evolving, some with higher-end features, on-site aestheticians • Typically, consumers first experience a product in a department store • No beauty advisors • Consumers can find premium and mid-tier fragrances in mass market retailers • Meaningful consumer experiences can create shopper retention among specialty stores and mass market retailers • Only wanted to sell Flare’s highest-turnover...

Words: 2695 - Pages: 11

Case 3-1 Omnico, Inc.: Follow Up on the Golf Course

...Table of contents Title Page……………………………………………………………………………………………………1 Table of Contents………………………………………………………………………………………..2 Statement of the Problem…………………………………………………………………………….3 Summary of the Facts………………………………………………………………………………….3 Analysis……………………………………………………………………………………………………..4 Recommendation…………………………………………………………………………………………4 Conclusion………………………………………………………………………………………………….5 References……………………………………………………………………………………………….…6 Statement of the Problem One of the problems that Buddy noticed through a market research report was that Omnico, Inc. was well bellow the industry average in customer retention. They are not going to be able to maintain a long- term relationship with their current clients. This is a big problem for this company because in my own experience it costs more time to attract new customers than it does to retain existing customers. Summary of the Facts Buddy Towers is the sales managers of Omnico, Inc. He has a lot of experience on the sales field. He has been the top- producing salesperson for 20 of the last 35 years; therefore, he knows how to interact with customers. The CEO/ president of this company was completely sure that Buddy will do a great job on everything he was planning to do to resolve the problem but some of the salespeople disagree with Buddy’s ideas to offer to pay for golf lessons to build a closer relationship with their key customers. Laura Kilburn......

Words: 676 - Pages: 3

7-20 Case

...Executive Summary In this case analysis, the main purpose is to explain that why the result based on budgeted sales data is different from the result based on the actual sales data. In order to make the explanation, I will provide the brief background in the introduction and critical issue sectors. Moreover, the quantitative and qualitative analysis will be delivered. In the quantitative analysis, I will explain the contribution-format income statement and breakeven point in sales dollars based on actual sales data in detail. Finally, I will also list few recommendations that allows the reader to select the best one fit for the Smithen Company. Introduction In order to generate more revenue by choosing the best alternative and sustain the company’s profitability in the long run, the following issue should be addressed and will be evaluated and analyzed in the following steps. Critical Issue Smithen Company, a wholesale distributor, sells three products – sinks, mirrors, and vanities. In addition, the company provides a product income statement that based on the budgeted sales, and the actual sales data that can be used to prepare a contribution-format income statement for month based on information given. The company also want the writer to give an explanation of why both the operating results and the break-even point in sales dollars are different from what was budgeted. Quantitative Analysis Contribution-Format Income Statement The sales of each product......

Words: 985 - Pages: 4

Vershire Company Inc Case

...Vershire Company & Aluminum Industry Industry of Aluminum Aluminum. Less spillage or breakage, ease of storage at home or when people travel, maintenance of soft drink carbonation, ease of lithograph and ease of recycling, aluminum production is one of the modern era’s great economic stories. The world’s primary aluminium industry produces over millions ton of aluminium metal per year. The most important markets for aluminium products are the transport, building and packaging sectors, however aluminium also finds application in electrical and mechanical engineering, office equipment, domestic appliances, lighting, chemistry and pharmaceuticals. The United States aluminum industry is the worlds largest, annually producing about $.1 billion in products and exports. U.S. companies are the largest single producer of primary aluminum. The U.S. industry operates over 00 plants in 5 states , produces more than billion pounds of metal annually and employs over 145,000. Aluminum is one of the few products and industries left in America that truly impacts every community in the country, either through physical plants and facilities, recycling, heavy industry, or consumption of consumer goods. The aluminum industrys performance is noteworthy, particularly in light of the proliferation of alternative materials and global competition. Transportation represents the largest market for aluminum in the United States. In 000, transportation accounted for .5 percent of all US...

Words: 3211 - Pages: 13

Case Analysis 10-3 Kansas City Zephyrs Baseball Club, Inc.

...publish summary bank statements) Why do the differences between owners’, players’, GAAP and truth number exist?(Can accounting numbers be neutral representations of what happened? What happens if a retired non-roster player (e.g. Joe Portocararo) returns to the active roster while continuing to earn the same money promised him in his guaranteed contract? Of what importance are the periodic net income numbers if the clubs can always be sold for huge profits? How should Bill Ahern resolve the accounting conflict between the owners and players? How much did the Kansas City Zephyrs Baseball Club earn in 1983 and 1984? Facts This case shows that how different accounting methods can lead a company to different positions. That is what Bill Ahern was selected on April 9 to focus on reviewing the finances of the Kansas City Zephyrs Baseball Club, Inc., which was bought on November 1, 1982 by five shareholders for $24 million, because both the representatives of the owner of the 26 major league baseball teams and the professional players association agreed that Kansas City Zephyrs Baseball Club’s operations were representative, and the baseball club entity was not owned by another corporation, and it did not own the stadium where they play. So Bill Ahern was reviewing their finances on April 17, 1985. He had to make a difficult judgement in next two days. He spent Tuesday reviewing the history of major league baseball and the relationship between the various entities. On......

Words: 1721 - Pages: 7

Accounting Exercise 3-20

...Exercise 3-20 The only method to ascertain the answers to these ratio questions, other than guessing is to calculate the effect on the ratio. I have set up the following values that will be used to calculate the ratios: Trial Balance Cash 2000 Accounts receivable 2000 Investments 2500 Prepaids 3000 Inventories 4000 Equipment 2500 Current liabilities 2000 Total liabilities 10000 Total shareholders equity 20000 Below, I place the ratio formula in each cell. Note that I place a $ before the column letter and a $ before the row number. This is so the formula will not change when I copy the formula down to the other actions. I review the action and ascertain what accounts would be affected by the action, and then I the change the amounts above in the trial balance to ascertain the effect of the "action" on the ratio For example: Issuance of long term bonds will increase cash and increase long term liabilities. I will change cash from 1000 to 2000 and total liabilities from 9000 to 10,000 When you change cash and total liabilities, the current ratio changes from 6.25 to 6.75 it increased The Acid test ratio changed from 2.75 to 3.25, it increased. The Debt to Equity ratio changed from .45 to to .5, it increased. Action Current......

Words: 343 - Pages: 2

Law 421 Week 3 Case Scenarios: Bugusa, Inc Law421 Week 3 Case Scenarios: Bugusa, Inc

...com/q/law-421-week-1-to-week-5-complete-course-law421-co/10448 LAW 421 Week 1 Role and Functions of Law Paper Resource: Case Brief Cipollone v. Liggett Group, Inc., et al. in Ch. 2, section 2-6, “Commerce Powers,” of the text. Write a 700- to 1,050-word paper in which you define the functions and role of law in business and society. Discuss the functions and role of law in your past or present job or industry. Properly cite at least two references from your reading. Format your paper consistent with APA guidelines. Click the Assignment Files tab to submit your assignment. LAW 421 Week 2 Addressing International Legal and Ethical Issues Simulation Summary Complete the Addressing International Legal and Ethical Issues simulation. Write a 350-word summary. In your paper, answer the following questions: * What are the issues involved in resolving legal disputes in international transactions? * What are some practical considerations of taking legal action against a foreign business partner based in another country? * What factors could work against CadMex's decision to grant sublicensing agreements? * When the local customs and laws conflict with the customs and laws of an organization operating abroad, which should prevail? Explain why. * How would you compare the issues in this simulation to the domestic legal issues discussed in your Week One readings? How should companies resolve domestic and international issues differently? Your paper must indicate which......

Words: 911 - Pages: 4

Executive Shirt Company, Inc.

...Case Analysis: Executive Shirt Company, Inc. Operations Management - I PGP1 Section B Group 4 Group Members AMARENDRA SAHOO PGP2011533 BHAWNA GOKANI PGP2011595 CHATARKAR ANURAG MAHADE PGP2011600 C.LALRUATSANGA 2011FPM06 RUPSA CHAKRAVARTY PGP2011837 SAARANG K. MEHTA PGP2011841 UTKARSH SINGH PGP2011923 Case Analysis: Executive Shirt Company, Inc. Summary: Mr. Dwight Collier, Gen. Manager of Executive Shirt Company (ESC) is planning to introduce customized shirts in his current production facility since they can fetch 75% more price as compared to regular shirts. Currently, ESC is manufacturing 16,000 shirts per month and they plan to manufacture 2,000 customized shirts per month without hampering the current production. The company has 5 departments, namely,  Cutting: 1 Machine, 4 Workers  Sewing: 48 Machines, 48 Workers  Inspection: 4 workers  Ironing: 4 Machines, 4 Workers  Packaging: 4 workers  Indirect Workers (material handlers) : 4 Workers Mr. Collier introduced a change in the manufacturing process by introducing a Laser Cutting Machine for customized shirt. He requested two of his managers, Mike and Ike to devise a production plan to maximize the profit from both the products. The highlights of their plans are  Mike’s Plan: To go with one production line manufacturing both the products simultaneously (other than the cutting process) o Eight Batches of regular shirts with 5 shirts each o One......

Words: 1521 - Pages: 7

Acc 305 Week 1 Assignments E 3-18, E 3-20, J Case 3-5

...ASSIGNMENTS E 3-18, E 3-20, J CASE 3-5 To purchase this visit here: http://www.nerdypupil.com/product/acc-305-week-1-assignments-e-3-18-e-3-20-j-case-3-5/ Contact us at: nerdypupil@gmail.com ACC 305 WEEK 1 ASSIGNMENTS E 3-18, E 3-20, J CASE 3-5 ACC 305 Week 1 Assignments E 3-18, E 3-20, J Case 3-5 Home Work Hour aims to provide quality study notes and tutorials to the students of ACC 305 Week 1 Assignments E 3-18, E 3-20, J Case 3-5 in order to ace their studies. ACC 305 WEEK 1 ASSIGNMENTS E 3-18, E 3-20, J CASE 3-5 To purchase this visit here: http://www.nerdypupil.com/product/acc-305-week-1-assignments-e-3-18-e-3-20-j-case-3-5/ Contact us at: nerdypupil@gmail.com ACC 305 WEEK 1 ASSIGNMENTS E 3-18, E 3-20, J CASE 3-5 ACC 305 Week 1 Assignments E 3-18, E 3-20, J Case 3-5 Home Work Hour aims to provide quality study notes and tutorials to the students of ACC 305 Week 1 Assignments E 3-18, E 3-20, J Case 3-5 in order to ace their studies. ACC 305 WEEK 1 ASSIGNMENTS E 3-18, E 3-20, J CASE 3-5 To purchase this visit here: http://www.nerdypupil.com/product/acc-305-week-1-assignments-e-3-18-e-3-20-j-case-3-5/ Contact us at: nerdypupil@gmail.com ACC 305 WEEK 1 ASSIGNMENTS E 3-18, E 3-20, J CASE 3-5 ACC 305 Week 1 Assignments E 3-18, E 3-20, J Case 3-5 Home Work Hour aims to provide quality study notes and tutorials to the students of ACC 305 Week 1 Assignments E 3-18, E 3-20, J Case 3-5 in order to ace their studies. ACC 305 WEEK 1 ASSIGNMENTS......

Words: 785 - Pages: 4

Case 3 the Kitchenware Company

...CASE STUDY 3: THE KITCHENWARE COMPANY Case study text: The Kitchenware Company It was almost 15 years ago when Dennis and Nick, two young sales executives, were chatting together as they were driving to see one of their clients. The topic was careers and what they really wanted to do with their lives. Like many people they dreamt of running their own business. But unlike most people they held onto their vision and commitment and drive over many years to make it a reality. From that initial conversation, it took another seven years for them to refine their vision, decide on the nature of their business, spot their opportunity and get the finances agreed and then to step into their new lives. They were kindred spirits, with a mutual affinity for sales, and they alighted on the fast-moving homeware business as the one where they had knowledge, competence and skills enough to make an impact. During this gestation period they set about acquiring more skills and contacts in their chosen field and also putting money away to finance their potential loss of earnings through the period of transition. Nick was working as a sales director in the homeware industry for a household name. Although extremely successful he was frustrated at being constrained in his ability to shape the future of the brand and the business. He was the guardian of the brand – getting customers to accept what the brand was like, not taking feedback from the customer to improve the product and the......

Words: 1652 - Pages: 7

Company Analysis of Apple Inc.

...the iPod, iPhone, Macintosh computer, iPad, and Apple Watch. Apple Incorporated was founded in 1976 by Steve Jobs and Steve Wozniak, who released the Apple II computer in 1977 (Apple Inc…, 2015). The next product launched by Apple Inc. was The Apple Lisa which was released in 1983 and was the first computer to have a mouse and a graphical user interface (Apple Inc…, 2015). The first Macintosh computer came in 1984 however it was not successful due to the lack of market share to compete with IBM (Apple Inc…, 2015). After several years of financial losses, Steve Jobs launched a product redesign in 1997 that led to the iMac in 1998 (Apple Inc…, 2015). During the 2000s, Apple began to focus on portal MP3 devices such as the iPod and mobile phones like the iPhone. Then Apple began a new line of business in the music industry with iTunes. Today, Apple Inc. is a major competitor within the computer and consumer electronics industry. Apple Inc. is headquartered in Cupertino, California and has 76,000 employee based in the United States. Apple Inc. has directly and indirectly created and supported 1.9 million jobs in the United States (Israel & Johnson, 2016). Apple Inc. has stores located in 18 countries including the United States (Apple Inc., 2016). After a brief overview and history of Apple Inc., this critical analysis will take a look at the industry in which it operates, apply economic theories to create profit maximization, analyze the economic implications of......

Words: 3474 - Pages: 14

Case Analysis on Costco Companies Inc.

...Case Analysis on Costco Companies Inc. Group- 5 Mastahat Ahmed Arif Md. Salehin Md. Nur Rahman Abdullah Md. Salim Sarker Md. Jahidur Rahim Tabrez Nazir 11164011 11164012 11164020 11164021 11164035 11164022 1 Case Introduction • On July 21, 1998, Pat Turpin, Vice president of Executive member services for Costco Companies Inc had to recommend how to market a new service program • Costco developed a portfolio of services • Services would be available with a annual membership fee of $ 100 • Testing was also conducted 2 Case Introduction •Never really had to market before •Through services they wanted to offer good value to customers •Turpin felt, marketing a new service related program is a big challenge •Selling insurance is very different from selling products 3 Background of the company • Costco Companies Inc.-founded in the north west of United States in 1983 • Costco followed the business format of price club • Costco also expanded internationally and in other parts of US • In July 1998, Costco operated in 24 states – UK, Canada, Mexico and Asia with 278 outlets • Warehouses- designed to operate efficiently • Costco had two types of members 4 Background of the company • They had 25 million card holders • In 1997 through membership fees they earned $400 million • In FY 1997- earned $312 million on sales of $21.5 billion • Costco provides- good brands, large size at good value • Through high volume......

Words: 731 - Pages: 3

Google Inc Case

...November 29, 5pm Name of the Company under study: GOOGLE, INC (Text pages 712-715) Where Headquartered (city/state): Mountain View, Ca Part I: Comprehensive Case Analysis – Developing HR Business Partner Competencies in this Case Analysis 1.0 Background on your Company (Type the Company’s background in 3 paragraphs.). Tip: See the “about us” or company information portion of the company’s website or other source. Keep track of all your sources. They are to be included in Section 10 of this report. The creation of goggle’s company starts in 1996 between two smart students of Stanford University, Larry Page and Sergey Brin. They first try to understand the importance of web pages for people. Their aim was to find the best and faster way to connect people with all information. The company was founded in September 1998, they offer results from a huge amount of Web pages. The results are based on a proprietary algorithm. Google’s technology for ranking Web pages is called PageRank http://www.hoovers.com/company/Google_Inc/hsrfri-1-1njht4-1njfaq.html The company growth gradually because of the index of the Websites and other online content that they made it accessible through their search engine to everybody who has access to internet. The company offers different types of useful search. Today, Google operates the leading Internet search engine, by offering very precise search results from actually billions of Web pages. The company is generating its......

Words: 2917 - Pages: 12

Дэвид Семел | MICROSOFT OFFICE 2017 EXCEL X64X86 | Tensei shitara Slime Datta Ken