Cumberland Metal Industries

Moreover, there is no sufficient information provided in ASC 410-20-25-10 to determine the fair value of the ARO due to the uncertainty of LOI to require removing the asbestos. This also applies to two of the warehouses residing in areas with no laws in place requiring special handling and disposal of the asbestos on building demolition or renovation. Lastly, the remaining 13 warehouses with asbestos residing in states with special asbestos handling and disposal laws, LOI has owned and operated for more than 50 years only incurring just minor renovations and repairs and has no plans in future to make significant renovations or demolish except for minor repairs and maintenance. The problem with ARO is the presence of an indeterminate settlement data as in ASC 410-20-25-10.

The major issue is determining why Ferguson Foundry Limited’s (FFL) actual profit was $367,600 lower than budgeted, despite selling 2,000 more wood stoves (12,000 instead of 10,000 units). This will be explained using Variance Analysis to demonstrate the underlying reasons why the company failed to meet its president’s expectations. FFL profit for 2010 was below budget due to many factors both production and marketing related.

In 2009, the Affordable Care Act passed a provision that expanded Medicare coverage to include certain individuals with diseases caused by environmental health hazards (EHH). While there are many potential diseases caused by environmental health hazards, the legislation intended to cover people who developed asbestos related disease (ARD) following exposure in a vermiculite mine in Libby, Montana.1 The provision was included in the ACA with the help of Senator Baucus of Montana, who had a role in writing the health care law.2 The goal was to increase benefits for this new category of Medicare-eligible individuals. The three components of the legislation were the expansion of Medicare benefits, the development of a pilot program, and the initiation of grants to establish screening programs for the early detection of diseases caused by environmental health hazards.1

ISSUE: Should LOI recognize an asset retirement obligation for each of the categories of warehouses with asbestos?

Analysis: 1. Review management memo related to asbestos reserves, external specialist report, and internal actuarial specialist report. Then, performed assessment of external specialist’s competence, capabilities and objectivity; and obtained an understanding of the work of the external specialist in accordance with firm policies. Next, auditor should test controls over the asbestos claims. And auditor should test the data and information used by the external specialist for accuracy and completeness. Finally, auditor should use an internal actuarial specialist to

However, in this case, the plaintiff did claim that defendants be held strictly liable and negligent because the dangers of the asbestos through maintenance was foreseeable when used in conjunction with their products. But the Corrigan explains in his opinion that by recognizing such claims by the plaintiff would provide an unprecedented expansion of strict products liability. While in California manufacturers are held strictly liable for a defect in the product. Yet, it has never been held that this responsibility extends to preventing injuries that would be used in conjunction with the defendants product. The dangerous features in question were not an integral part of the product’s design. Therefore through this fact, Corrigan had asserted that to decide for the plaintiff would not further the purposes of strict liability, nor would it serve public policy by requiring manufacturers to warn about the dangerous propensities of products they do not design, make or sell.

There is certainly a market for this product. It is the market that is currently dominated by asbestos pad and micarta slab users, and is comprised of uneducated (about cushion pads) and price-sensitive customers. Prior to CMI’s involvement, “the pile-driving industry had paid very little attention to cushion pads.” There was no dominant manufacturer, little-to-no branding, and ambiguous distribution channels.

This haevily disguised case is set in the “nature “woodstoves business in 1986. It is not based on The Vermont Castings Company. The issue is product line strategy based on product line profitability.

The cost for the Asbestos pads is $1,000 in Colerick project-$50 per set and 20sets required. Also Asbestos pad cost is $2,000 in Fazio project-$40 per set and 50 sets required. In conclusion, Total value saved by using the CMI pad becomes $8,520.8($7,520.8 + $1,000) in Colerick project and $9,520.8($7,520.8 + $2,000) in Fazio project.

At this point two customer tests of the product have been conducted one by Corelick and another by Fazio Construction. These exercises served not only as product tests but produced a good comparison to asbestos pads. There are various factors to consider in determining the true cost of each pad:

We encourage CMI to identify the top contractors and dispatch sales representatives to educate these companies on the benefits of the new CMI metal cushion pad in comparison to what is currently being offered in the market (asbestos pads). The sales representatives can use the results from the Colerick and Fazio tests to demonstrate the advantages of switching to CMI metal pads. Allowing them to test the product before paying will only improve brand reputation and overcome price objections. We know they are very interested in making money, thus we can assume they are interested in saving as much time and money as possible throughout each pile driving job. Contractors bid on job contracts by estimating the amount of time it would take to drive the specified piles the distance required, and by utilizing the new CMI metal pads and simultaneously minimizing the associated time per job, these contractors can win more jobs and produce more efficient work overall. Once independent pile-driving companies such as Colerick and Fazio try the product and see the unique value and advantages that CMI pads offer, they can promote the product through word of mouth and by exemplary job execution which will in turn help aid in making CMI pads the new industry standard and most well-known pile-driving pad brand.

Monmouth Inc. is a leading producer of engines and massive compressors used to force natural gas through pipelines and oil out of wells. It is has dependence on sales to the oil and gas industries, the earnings of which is fluctuated owing to cyclical nature of heavy machinery and equipment sales. Anyway, the company’s amount of earnings growth and sales are above average in long-term view. From the last three acquisitions the company adhered to only leading companies in their respective market segments. The fourth company on the list of acquisition was Robertson Tool Company.

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Destin Brass Products is a manufacturing company specialized in brass products started in Destin, Florida, 1984, running by Roland Guidry (president), Peggy Alford (controller), John Scott, (manufacturing manager) and Steve Abbott (sales and marketing manager). There are three major product lines: valves (24% of company revenue), pumps (55% of revenue) and flow controllers (21 of revenue). Recently, due to its competitors keeping reducing product price, Destin found it become difficult to match such low price with a profitability decline under the current cost system. A meeting was held among senior management aiming to find out some new strategies to keep Destin’s competitive position.

Gainesboro Corporation was founded in 1923 by two mechanical engineers, James Gaines and David Scarboro. It was the industry leader in press and mould manufacturing. Its revenues declined from $911 million in 1998 to $757 million in 2004. To combat the decline in revenues and weakening profit margin it followed a two prong approach. First it devoted a greater share of its research and development budget to CAD/CAM to establish its industry leadership. Second the company underwent two major restructuring. The company had set the objective of achieving 15% CAGR growth.