accg330 Essay

7774 Words May 22nd, 2014 32 Pages
ACCG330 SEMINAR ASSIGNMENTS
(Assignments are due in the respective seminars in the week designated)

Due Date

TOPIC

Week 2

No assignment is due this week. Please read the Baldwin Bicycles Case prior to class. Week 3

Strategic process and strategic analysis ........................................... page 2
Case: Baldwin Bicycles

Week 4

Strategy and management control.
Case: Lincoln Electric

Week 5

Strategic change and strategic flexibility
Class Test 1 (during normal seminar)

............................................. page 5

No assignment is due this week due to class test.
Week 6

Activity based costing ........................................................................... page 6
Case:
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Leister to increase
Baldwin's purchasing, inventorying, and production costs over and above the added costs that would be incurred for a comparable increase in volume for Baldwin's regular products.
On the positive side, Ms. Leister was acutely aware that the "bicycle boom" had flattened out, and this plus a poor economy had caused Baldwin's sales volume to fall in the past two years.1 As a result, Baldwin currently was operating its plant at about 75% of a one-shift capacity. Thus, the added volume from
Hi-Valu's purchases could possibly be very attractive. If agreement could be reached on prices, Hi-Valu would sign a contract guaranteeing to Baldwin that Hi-Valu would buy its own-brand bicycles only from
Baldwin for a three-year period. The contract would then be automatically extended on a year-to-year basis, unless one party gave the other at least three months notice that it did not wish to extend the contract.
Suzanne Leister realized she needed to do some preliminary financial analysis of this proposal before having any further discussions with Karl Knott. She had written on a pad the information she had gathered to use in her initial analysis; this information is shown in Exhibit 2.

1

The American bicycle industry is very volatile. From 1967 to 1970 sales average about 7 million units a year; in 1973 sales were 15 million units; in 1975 sales were back down to 7.5 million units and in 1982 sales were 10 million units.

2

EXHIBIT 1:

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