Archives: Solution Manual

QUESTIONS: 4-1. Give examples of unethical or unsustainable behavior that firms in the food and beverage industry might undertake. ● Endangering water supplies 4-2. What types of sustainable practices has Coca-Cola adopted over time? ■ Water Neutral Strategies ● Invested […]

PART 2 THE ENVIRONMENT OF INTERNATIONAL BUSINESS CHAPTER 4 ETHICS, CORPORATE SOCIAL RESPONSIBILITY, SUSTAINABILITY AND GOVERNANCE IN INTERNATIONAL BUSINESS Instructor’s Manual by Marta Szabo White, Ph.D. I. LECTURE STARTER/LAUNCHER The concepts of ethics and legal frameworks are central to this […]

● APPLY YOUR UNDERSTANDING 3-18. Suppose you get a job at Kismet Indemnity, a life insurance company. In its 45-year history, Kismet has never done any international business. Now its president, Randall Fraser, wants to expand abroad. You have noted […]

QUESTIONS: 3-1. Why are the Chinese such heavy users of the Internet? (LO 3.2; LO 3.5; AACSB: Reflective thinking) ■ Government bans Western social media sites that may be critical of the Chinese government, 3-2. What are the characteristics of […]

PART 2 THE ENVIRONMENT OF INTERNATIONAL BUSINESS CHAPTER 3 THE CULTURAL ENVIRONMENT OF INTERNATIONAL BUSINESS Instructor’s Manual by Marta Szabo White, Ph.D. I. LECTURE STARTER/LAUNCHER ■ Many will be familiar with Richard D. Lewis’ When Cultures Collide and more recently, […]

2-18. Globalization provides numerous advantages to businesses and consumers around the world. At the same time, some critics believe that globalization is harming various aspects of life and commerce. In what ways is globalization good for firms and consumers? In […]

● SUGGESTED SOLUTIONS TO CASE QUESTIONS QUESTIONS: 2-1. What are the main characteristics of born global firms? ■ Born globals target a dozen or more countries within the first few years of their 2-2. What drivers/causes of globalization have allowed […]

PART 1 FOUNDATION CONCEPTS CHAPTER 2 GLOBALIZATION OF MARKETS AND THE INTERNATIONALIZATION OF THE FIRM Instructor’s Manual by Marta Szabo White, Ph.D. I. LECTURE STARTER/LAUNCHER The Value Chain concept is central to this chapter. To ensure that students understand this […]

QUESTIONS 1-1. What advantages does Facebook obtain from doing business in international markets? ■ Capitalizing upon the global interdependency and interconnectedness among economic, 1-2. Why have some foreign governments banned their citizens from accessing Facebook? ■ Some governments fear the […]

● SUGGESTED SOLUTIONS TO CASE QUESTIONS 1-4. What is the nature of the international business environments Harley faces? What types of risk does the firm face? ■ Domestic and international environment: complex and risky ■ All FOUR types of risks […]

PART 1 FOUNDATION CONCEPTS CHAPTER 1 INTRODUCTION: WHAT IS INTERNATIONAL BUSINESS? Instructor’s Manual by Marta Szabo White, Ph.D. I. LECTURE STARTER/LAUNCHER ■ Consider having everyone in class introduce themselves. One way to initiate introductions is distribute random pages torn from […]

Comprehensive Problem (Continued) Part 3 2013 (a) Miscellaneous Expenses …………………………………….. 15 Accounts Payable ……………………………………………….. 1,287 Interest Revenue ……………………………………………. 52 Cash ……………………………………………………………… 1,250 Adjust cash account. (Separate entries are acceptable.) (b1) Allowance for Doubtful Accounts …………………………. 679 Accounts Receivable ……………………………………… 679 […]

Problem 11-2B (60 minutes) 1. Each employee’s FICA withholdings for Social Security Ahmed Carlos June Marie Total Maximum base ………… $110,100 $110,100 $110,100 $110,100 Earned through 9/23 … 108,500 36,650 6,650 22,200 Amount subject to tax $ 1,600 $ 73,450 […]

Exercise 11-17 (concluded) (b) Aug 31 Salaries (or Wages) Expense ………………………….. 10,020.00 FICA—Social Sec. Taxes Payable ………….……. 298.84 FICA—Medicare Taxes Payable ……………..……. 145.29 Employee Fed. Inc. Taxes Payable ………………. 2,380.00 Employee State Inc. Taxes Payable ……….……. 388.00 Employee Benefits Plan […]

Chapter 11 Current Liabilities and Payroll Accounting QUESTIONS 1. A current liability is expected to be paid within one year or the company’s operating cycle, whichever is longer. Any liability that is not current is considered to be long term. […]

SERIAL PROBLEM — SP 25 Serial Problem, Business Solutions (50 minutes) COMPUTING NET CASH FLOWS FROM NET INCOME Net income Cash flows Sales……………………………………………………………………$375,000 $375,000 1. Payback period = = 2.7 years 2. Accounting rate of return = = 40.8% *Average […]

Problem 25-2B (Continued) Part 4 PROJECT A Present Value of Net Cash Flows Present Present Value of Value of Net Cash Flows 1 at 8% Annuity Net Cash Flows Years 1-4……………………………………………… $99,900 3.3121 $330,879 PROJECT B Present Value of Net […]

Problem 25-5A (Continued) Part 3 Sales Mix Recommendation with Second Shift. If the second shift is added, the maximum possible output of G will double However, this level of output exceeds the company’s market constraint of 600 units of G […]

Exercise 25-26 (20 minutes) ALTERNATIVE A: INCREASE OR (DECREASE) IN NET INCOME Cost to buy new machine………………………………………………………………..$(115,000) ALTERNATIVE B: INCREASE OR (DECREASE) IN NET INCOME Cost to buy new machine………………………………………………………………..$(125,000) Cash received to trade in old machine…………………………………………….. 52,000 Reduction in […]

Exercise 25-13 (20 minutes) Using Excel, Project X1 (X2) has an internal rate of return of 20.34% (12.99%). Project X1 Project X2 A B C D 1 Initial investment -80000 -120000 2Annual cash flows, end of period Both of these […]

Quick Study 25-27 (15 minutes) 1. Payback period of investment = €80,000,000 / €16,000,000 = 5 years 2. Present value of cash inflows (€16,000,000 x 5.7466) €91,945,600 Less: Amount to be invested………………………………………. (80,000,000) Net present value of investment…………………………………..€11,945,600 EXERCISES Exercise […]

Chapter Outline I. Managerial Decision Scenariosconsider each decision task discussed below independent from the others. A. Additional Business 1. Effect on net income must be considered when deciding whether to accept or reject an order; reject if loss results. 2. […]

SERIAL PROBLEM — SP 24 Serial Problem, Business Solutions (20 minutes) 1. The balanced scorecard is a system of performance measures that requires managers to think of their company from four perspectives: 2. Below are some examples of balanced scorecard […]

Problem 24-1B (Continued) c. Responsibility Accounting Performance Report Plant Manager, Chicago Plant For the Month of April Budgeted Actual Over (Under) Amount Amount Budget Controllable Costs Dept. manager salaries………. $ 104,000 $ 101,500 $ (2,500) Utilities…………………………….. 48,000 55,200 7,200 Part […]

Problem 24-1A (Continued) c. Responsibility Accounting Performance Report Plant Manager, Indiana Plant For the Year Budgeted Actual Over (Under) Amount Amount Budget Controllable Costs Dept. manager salaries……………..$ 95,000 $ 97,500 $ 2,500 Utilities……………………………………. 9,000 8,300 (700) Part 2 The plant […]

Exercise 24-8 (15 minutes) 1. Location Net income Average assets Return on investment 2. The recommendation is to pursue Location B because its return on investment (assets) is 18%, compared to 16% at Location A. Moreover, given the normal return […]

Quick Study 24-11 (continued) Investment turnover = Sales / Average invested assets Thus, Average invested assets = $10,400,000 / 1.5 = $6,933,333 Quick Study 24-12 (10 minutes) Profit margin = $ 516,000 / $2,420,000 = 21.3% Return on investment (assets) […]

Problem 23-6BA (Concluded) Part 2 Under management by exception, the manager would first identify the The largest variance amounts occur for the materials quantity variance, the materials price variance, the direct labor efficiency variance, and the volume and controllable overhead […]

Problem 23-2B (Continued) Part 2 (a) Analysis of sales variance Total Per unit Budgeted sales…………………………………………………….$3,600,000 $150.00 Interpretation: The sales variance is favorable because the actual price was higher than planned. (b) Analysis of direct materials variance Total Per unit Budgeted […]

Problem 23-3A (Continued) Part 4 Direct labor variances Preliminary computations Actual hours used: 30,500 hours (given) Direct labor cost variances Actual units at actual cost [30,500 hrs. @ $17.25]………………………………………$526,125 Standard units at standard cost [30,000 hrs. @ $17.00]……………………………… 510,000 Direct […]

Exercise 23-22 (25 minutes) Preliminary calculations: Variable overhead rate per DL hour = $32,000/32,000 = $1 per hour Part 1 Total actual overhead (given) ………………………… $81,700 Flexible budget overhead Variable ($1 per hour x 36,000 hours)…………………. $36,000 Fixed (given)……………………………………………………. 48,000 […]

Exercise 23-15 (25 minutes) Part 1 Direct materials price variance: Actual cost of direct materials used (16,000 x $4.05)…………………………$ 64,800 Direct materials quantity variance: Actual quantity used x Standard price (16,000 x $4.00)……………………..$ 64,000 Standard quantity x Standard price (15,000* […]

Exercise 23-2 (30 minutes) TEMPO COMPANY Flexible Budgets For Quarter Ended March 31, 2015 Flexible Budget Flexible Flexible Flexible Variable Amount per Unit* Total Fixed Cost Budget for Unit Sales of 6,000 Budget for Unit Sales of 7,000 Budget for […]

Chapter Outline 1. To help identify factors causing the overhead cost variance managers will analyze the variance separately for controllable and volume variances. a. The controllable variance is the difference between the actual overhead costs incurred and the budgeted overhead […]

Problem 22-6B (50 minutes) SONY STEREO Cash Budgets For April, May, and June April May June Beginning balance………………………………….. $ 3,000 $ 53,000 $ 44,000 Cash receipts Collection on accounts receivable*………… 136,000 210,000 290,200 Receipts from bank loan……………………….. 80,000 _______ _______ […]

Problem 22-4B (130 minutes) Part 1 NABAR MANUFACTURING Sales Budgets July, August, and September 2015 Budgeted Units Budgeted Unit Price Budgeted Total Dollars July 2015…………………………………………………….21,000 $17.00 $ 357,000 Part 2 NABAR MANUFACTURING Production Budget July, August, and September 2015 July […]

Problem 22-8A (Continued) Part 4 DIMSDALE SPORTS CO. General and Administrative Expense Budgets January, February, and March 2016 January February March Total Salaries………………………………………………$12,000 $12,000 $12,000 $36,000 * Depreciation expense calculations Annual Amount January February March Total Equipment owned on 12/31/2015…………………. […]

Problem 22-4A (Concluded) Supporting Footnotes Note C Beginning receivables………………………………………………… $ 342,248 Note D Beginning raw materials inventory……………………………… $ 98,500 Purchases of raw materials………………………………………… 581,500 Less materials used in production**…………………………… (600,000) Ending raw materials inventory*…………………………………. $ 80,000 *Also equals 4,000 units […]

Problem 22-2A (continued) (2) BUILT-TIGHT Cash Budget For July, August, and September July August Sept. Beginning cash balance*………………………. $15,000 $15,000 $25,504 Cash disbursements Payments for direct materials………………… 16,160 13,440 13,760 Payments for direct labor……………………… 4,040 3,360 3,440 Payments for overhead…………………………. […]

Exercise 22-29 (10 minutes) HECTOR COMPANY Budgeted Cash Disbursements For August and September August Sept. Payments for merchandise*…………………………………………..$14,400 $19,200 Selling expenses (10% of sales)……………………………………..7,200 6,600 **Equals prior month’s purchases. Note that depreciation expense is excluded since it is a non-cash […]

Exercise 22-22 (30 minutes) Mike’s Motors Corp. Cash Budget For July, August, and September July August September Beginning cash balance $34,000 $30,000 $30,000 Cash receipts 85,000 111,000 150,000 Loan balance Loan balance, Beg. of month $0 $24,000 $13,380 Additional loan […]

Exercise 22-9 (15 minutes) 1. RAD CO. Direct Labor Budget For April, May, and June April May June Budgeted production (units)………………….. 442 570 544 2. RAD CO. Factory Overhead Budget For April, May, and June April May June Total labor […]

Quick Study 22-19 (10 minutes) GUITAR SHOPPE Cash Receipts Budget For Month Ended September 30 Cash receipts from September cash sales (40% x $170,000)……….. $ 68,000 Quick Study 22-20 (10 minutes) MUSIC WORLD Cash Receipts Budget For Month Ended September […]

SERIAL PROBLEM — SP 21 Serial Problem, Business Solutions (50 minutes) 1. Selling price per composite unit 3 desk units @ $1,250 per unit………………………………………………..$3,750 2. Variable costs per composite unit 3 desk units @ $750 per unit…………………………………………………..$2,250 2 chairs @ […]

Problem 21-4B (75 minutes) Part 1 Instructor note: Use the equation in Exhibit 21.12 2015 break-even in dollar sales = Fixed costs / Contribution margin ratio *To compute contribution margin ratio Sales price per unit ($750,000 / 20,000)……………………………………………………………..$37.50 Variable costs […]

Problem 21-5A (Continued) Part 3 Forecasted contribution margin income statements for each product assuming sales increase to 60,000 units with no change in unit sales price HENNA CO. Forecasted Contribution Margin Income Statement Product T Product O Sales*………………………………………………………………..$2,400,000 $2,400,000 Variable […]

Exercise 21-23 (25 minutes) 1. Selling price per composite unit 5 Easy returns @ $50 each…………………………………………………… $ 250 2. Variable costs per composite unit 5 Easy returns @ $30 each…………………………………………………… $ 150 3 Moderate returns @ $75 each……………………………………………. 225 2 […]

Exercise 21-6 (20 minutes) The scatter diagram and line of estimated cost behavior appear below. Selecting 0 and 2,400 units sold as the activity levels yields $2,500 as the estimate of fixed costs and the following estimate of variable costs […]

Alternate Demo Problem Twenty-One Problem #1 Trimble Company sells an electronic toy for $40. The variable cost is $24 per unit and the fixed cost is $32,000 per year. Management is considering the following changes: Alternative #1 Lease a new […]

Reporting in Action — BTN 20-1 1. These costs are part of getting the products that Apple sells to its 2. These costs would either be expensed as cost of sales or as selling and administrative expenses. Thus, net income […]