Chapter 6, Problem 4QAP

Wesco Incorporated’s only product is a combination fertilizer/weedkiller called GrowNWeed. GrowNWeed is sold nationwide to retail nurseries and garden stores.   Zwinger Nursery plans to sell a similar fertilizer/weedkiller compound through its regional nursery chain under its own private label. Zwinger does not have manufacturing facilities of its own, so it has asked Wesco (and several other companies) to submit a bid for manufacturing and delivering a 20,000-pound order of the private brand compound to Zwinger. While the chemical composition of the Zwinger compound differs from that of GrowNWeed, the manufacturing processes are very similar.   The Zwinger compound would be produced in 1,000-pound lots. Each lot would require 25 direct labor-hours and the following chemicals:   Chemicals Quantity in Pounds AG-5 300 KL-2 200 CW-7 150 DF-6 175     The first three chemicals (AG-5, KL-2, and CW-7) are all used in the production of GrowNWeed. DF-6 was used in another…

Wesco Incorporated’s only product is a combination fertilizer/weedkiller called GrowNWeed. GrowNWeed is sold nationwide to retail nurseries and garden stores.   Zwinger Nursery plans to sell a similar fertilizer/weedkiller compound through its regional nursery chain under its own private label. Zwinger does not have manufacturing facilities of its own, so it has asked Wesco (and several other companies) to submit a bid for manufacturing and delivering a 20,000-pound order of the private brand compound to Zwinger. While the chemical composition of the Zwinger compound differs from that of GrowNWeed, the manufacturing processes are very similar.   The Zwinger compound would be produced in 1,000-pound lots. Each lot would require 25 direct labor-hours and the following chemicals:   Chemicals Quantity in Pounds AG-5 300 KL-2 200 CW-7 150 DF-6 175     The first three chemicals (AG-5, KL-2, and CW-7) are all used in the production of GrowNWeed. DF-6 was used in another…

Honey Bun Limited is a food processing company listed on the Jamaica Stock Exchange (JSE). They usethe systems development life cycle to develop the capability to analyze what type of pastries sell best with different beverages honey Bun Limited and other food manufacturers have been using GAAP in preparing their financial statements. Recently, the JSE mandated that all companies should implement the IFRS system in addition to GAAP. Because Honey Bun Limited current system cannot handle the IFRS requirements, the financial reporting system must be modified.

A manufacturer of packaging for companies that produce breakfast cereals is considering alternatives regarding the process it uses to pre-process carton paper used to make the packaging. Historically, the company has been using equipment which cuts raw carton paper received from its various suppliers. This cut paper is further painted and assembled into a box shape by two other pieces of equipment. Recently, however, most of its customers began requesting that certain design elements be pressed into the packaging, giving the packaging more visual appeal. The customers were willing to pay more for the added service, making it particularly lucrative for the firm to have incorporate this possibility into its packaging offerings. Managers believed that the existing equipment would be able to handle the new process with certain modifications. In addition to modifying the existing equipment, the company two other alternatives. All alternatives will be able to produce the desired result, will…

A company uses the systems development life cycle to develop the capability to analyze what type of pastries sell best with different beverages honey Bun Limited and other food manufacturers have been using GAAP in preparing their financial statements. Recently, the JSE mandated that all companies should implement the IFRS system in addition to GAAP. Because Honey Bun Limited current system cannot handle the IFRS requirements, the financial reporting system must be modified. The head of the accounting department is not satisfied with the implementation of the new system. He believes that the new system will result in job losses for many of the bookkeepers. They are threatening industrial action. In your role as project sponsor, what should you do to resolve the situation?

Coyle Pharmaceuticals produces two chemicals (Chem AB, and Chem XY) used in the production of two of its most wide-selling anti-cancer drugs. Coyle Pharmaceuticals has recently received significant criticism from environmental groups, local residents, and the federal government concerning its environmental performance. The CEO of the company wants to know which product is the main source of the environmental problems. The Management Accountant has assembled the following data to help answer this question:     Chem AB Chem XY Pounds of fertilizer produced 6,000,000 5,000,000 Pounds of scrap recycled 80,000 20,000 Packaging materials (kilograms) 2,400,000 1,200,000 Energy usage (kilowatt hours) 800,000 400,000 Engineering hours (process design) 18,000   12,000 Pollution control (machine hours) 300,000 75,000 Pounds of solid residues treated 90,000   30,000 Inspection hours (environmental) 30,000   15,000 Cleanup…

Widget Corporation is the manufacturer of many popular children’s toys but have seen a great decrease in sales and the board of directors is worried that the business may no longer be viable. The board decides to aggressively sue other toy manufacturers that have likely been infringing on Widget’s intellectual property, enter into a joint venture with a another company to build a new factory to reduce costs, and make large and notable donations to children hospitals as part of a PR campaign to raise the corporation's image. Additionally, the board decides to start manufacturing medical equipment to make up for the projected shortfalls in budget, even though the corporation was formed to make toys. Some shareholders are upset and sue the board of directors. b) Would the ultra vires doctrine play a role in the shareholders suit again the board? Why or why not?

Honey Bun Limited is a food processing company listed on the Jamaica Stock Exchange (JSE). They usethe systems development life cycle to develop the capability to analyze what type of pastries sell best with different beverages honey Bun Limited and other food manufacturers have been using GAAP in preparing their financial statements. Recently, the JSE mandated that all companies should implement the IFRS system in addition to GAAP. Because Honey Bun Limited current system cannot handle the IFRS requirements, the financial reporting system must be modified. Question:

Consumers Union is a nonprofit organization that providesinformation and counsel on consumer goods and services. A major part of its functionis the testing of different brands of consumer products that are purchased on the openmarket and then the reporting of the results of the tests in Consumer Reports, a monthlypublication. Examples of the types of products it tests are middle-sized automobiles,residential dehumidifiers, flat-screen TVs, and boys’ jeans.a. In what ways are the services provided by Consumers Union similar to assuranceservices provided by CPA firms?b. Compare the concept of information risk introduced in this chapter with the information risk problem faced by a buyer of an automobile.c. Compare the four causes of information risk faced by users of financial statements asdiscussed in this chapter with those faced by a buyer of an automobile.d. Compare the three ways users of financial statements can reduce information riskwith those available to a buyer of an…