You are a division manager of a large public company. Your bonus is calculated on your division 's net income targets that you must meet. This year that target is $1.5 million. You are authorized to sign off on any decision made within your division. You are faced with the following situation:…
Ethics in Cost Control . (Exercise 1-9) Zoya Arbiser, regional manager of Gold Medal Sports Shops, is reviewing the results of 15 stores in her region. Store managers are moved annually. Each store manager's income is very dependent on the direct contribution margin of that store. For the past year, Store 9 has been managed by a person who has operated several other profitable stores in recent years and is about to be promoted to a larger store. Zoya notices several items that bother her.…
At risk of receiving no bonus and with salaries already under market value ¡V hospital management had great incentive to do whatever it took to meet their goals…
a) (5 marks) Using the table below, classify the following items as Assets, Liabilities or Shareholders' Equity: Common Shares $10 million; Accounts Receivable $2 million; Unearned Revenue $5 million; Goodwill $4 million; Income Tax Payable $6 million; Investments $1 million; Bank Advances $15 million; Preferred Shares $5 million; Retained Earnings $3 million; Property Plant & Equipment $7 million…
5. A manager's compensation plan that only offers financial incentives for increases in quarterly profitability may create agency problems in that:…
David Green is the manager of Store 88 of Pet Groom & Clean (PG&C). Bonus program of PG&C will reward store managers who improve their performance over that of the budget 20% or more. In 2010, David implemented some changes in price and promotion in order to cut costs and increase revenue. He decreased price on Tuesday, Wednesday, Thursday to get more customers and increase price on Friday, Saturday, and Monday to balance the promotion price he offered in other days of the week. As a result, actual number of customers visits the store increase from 20% to 30%. In term of costs, David saved the labor costs through his careful scheduling and effective management. Actual labor-hour…
The purpose of this report is to help a financial special assistant, Linda, to analyze the financial position of Atlas Metals Company and deciding its capital budgeting and capital structure. Firstly, I explain why firm should use Net Present Value (NPV) methods for capital budgeting rather than Return on Investment (ROI) method and Payback Period method. Secondly, I calculate the Weighted Average Cost of Capital (WACC) which will be used as discount rate while calculating NPV. Then, I decide which rapid prototyping system company should invest as well as I compare the each expansion projects’ IRR with WACC to decide which projects should be invested and which should not. After deciding projects which should be accepted, I draw Investment Opportunity Schedule (IOS) and Marginal Cost of Capital (MCC) graphs to decide where the company should finance accepted projects.…
Materials, equipment, and facilities. The costs of materials (whether from the entity's normal inventory or acquired specially for research and development activities) and equipment or facilities that are acquired or constructed for research and development activities and that have alternative future uses (in research and development projects or otherwise) shall be capitalized as tangible assets when acquired or constructed. The cost of such materials consumed in research and development activities and the depreciation of such equipment or facilities used in those activities are research and development costs. However, the costs of materials, equipment, or facilities that are acquired or constructed for a particular research and development project and that have no alternative future uses (in other research and development projects or otherwise) and therefore no separate economic values are research and development costs at the time the costs are incurred. See Topic 360 for guidance related to property, plant, and equipment; the Impairment or Disposal of Long-Lived Assets Subsections of Subtopic 360-10 for guidance related to impairment and disposal; and paragraphs 360-10-35-2 through 35-6 for guidance related to…
ABC Manufacturing Co., Inc. is a small company with 120 full time employees. We produce aluminum doors and windows. Although we are highly successful, we find that it can be difficult to retain our valued employees. Human resources has decided to evaluate several compensation plans and see if any options exist that can help retain employment and improve productivity.…
This case study will be an outstanding source to use as reference when determining the sales incentive plan. The company must set objectives for the sales person to achieve and then develop a compensation plan to assist with motivating…
In 2011 two Asian firms entered the Canadian market in 2011. An Asian competitor made a major sales push by slashing prices in late 2011, cutting dramatically into Alliston’s sales in 2012. This move caused Alliston to lay-off 50 employees their largest layoff in company history. Alliston introduces new products to its line to counter the Asian firm but employees had no interest in working on the new products and preferred the old products to work on. Alliston in late 2012 in an effort to increase efficiency persuaded the union to accept an incentive program in exchange for job security. An individual performance pay plan was implemented with no detailed records to set standards. Standards were based on the estimates of supervisors based on a failed year; this shows that the compensation strategies and practices directly affected the company’s production quality. Supervisors can’t receive the incentive bonus and are making less money than their subordinates causing more pressure on them. Customers are complaining about product price and quality, Alliston’s sales revenue continues to fall. Due to high wastage of raw materials and supplies, labour costs are up and costs per unit are at an all-time high. The other concern is the quality of the products as defective units reach an all-time high.…
The purpose of this paper is to raise productivity and profitability at the Portland Plant by improving upon performance objectives with recommendations on forecasting methods, process layout, appropriate technology, production approach, inventory approach, and a quality approach with tools to manage, measure, and assess quality.…
Evaluate TMS’s system of measuring, evaluating, and rewarding the performances of the regional general managers. Be sure to identify the key issues related to managerial authority and financial responsibility.…
Globalization and economy downturn are forcing companies’ to structure their benefit programs differently. Before some companies had a wide array of compensation for employees, but that has changed and these companies had to find ways to cut cost of benefits offer to new employees and find new programs to retain their current employees. Companies are basing their compensation and benefits programs on the economy decline and are attempting to contain staff sizes, payrolls, and benefits costs. On the other hand, small businesses have hard time competing with large companies (Cascio p. 463) because they have limited resources. For instance, BC Laboratories has been in business for more than 50 years and for the past two years has been struggling because business has slowed down. The company had to restructure the organization and combined some of the positions to save money and stay in business. Their employees’ morale is low and lately they have had high employee turnover. The human resources department has presented a new compensation and benefit proposal to the BC Labs owner. Because BC Labs is going through hard times, a non-monetary incentive program has been proposed without affecting the company’s budget. This will increase employees’ morale and their motivation, yielding positive results.…
The Best Laid Incentive Plan is a case analysis depicting organizational behavior and performance appraisal management. Rainbarrel Products is a loosely ran consumer durables manufacturer. Within the last ten years, Rainbarrel Products has shown difficulties rebounding from a sluggish economy. The CEO, Keith Randall, once described as “aspiring” and “innovative”, has allowed the company to fall victim to a downward economy due to the recent lax in leadership. In addition, Rainbarrel is not adjusting to the decrease in consumer spending in comparison to their competitors; however, this is the least of the company’s problems. In efforts to save Rainbarrel from continuous distress, Randall hires Hiram Phillips as the Chief Financial Officer (CFO) and Chief Administrative Officer (CAO).…