Chapter 6, Problem 6QAP

Cabanarama Inc. designs and manufactures easy-to-set-up beach cabanas that families can set up for picnicking, protection from the sun, and so on.  The cabanas come in a kit that includes canvas, lacing, and aluminum support poles.  Cabanarama has expanded rapidly from a 2-person operation to one involving over a hundred employees.  Cabanarama’s founder and owner, Frank Love, understands that a more formal approach to standard setting and control is needed to ensure that the consistent quality for which the company is known continues. Frank and Annette Wilson, his financial vice president, divided the company into departments and designated each department as a cost center.  Sales, Quality Control, and Design report directly to Frank.  Production, Shipping, Finance, and Accounting report to Annette.  In the production department, one of the supervisors was assigned the materials purchasing function.  The job included purchasing all raw materials, overseeing inventory handling…

Extreme Inc. is a newly established enterprise. It was set up by an entrepreneur who is generally interested in the business of providing engineering and operational support services to aircraft manufacturers. Extreme Inc., through the contacts of its owner, received a confirmed order from a well- known aircraft manufacturer to develop new designs for ducting the air conditioning of their aircraft. For this project, Extreme Inc. needed funds aggregating to $1 million. It was able to convince venture capitalists and was able to obtain funding of $1 million from two Silicon Valley venture capitalists. The expenditures Extreme Inc. incurred in pursuance of its research and development project follow, in chronological order: January 15, 2015: Paid $175,000 toward salaries of the technicians (engineers and consultants) March 31, 2015: Incurred $250,000 toward cost of developing the duct and producing the test model June 15, 2015: Paid an additional $300,000 for revising the ducting process…

Al Omani, an SAOC company based in Muscat specializing in the manufacture and distribution equipment for disabled people, and their major clients are ministry of health and various private hospitals in Oman. Currently the company is evaluating a new capital expenditure project. In a joint venture with a German based company, it has developed a remote controlled pushchair, one of the first of its kind on the market. It has been unable to obtain a patent for the invention, but the management is sure that it will capture the market for the first three years. However year 4 and 5 it expects to be faced with firm competition. The details are set out below. (1) The project has an immediate cost of 2, 100, 000 . () Sales are expected to be RO.1,550,000 per annum for years 1 to 3, falling to RO.650,000 per annum for the two years after that No further sales of the product are expected after the end of this five-year period. (3) Cost of sales is 40% of sales. (4) Distribution costs represent…

Extreme Inc. is a newly established enterprise. It was set up by an entrepreneur who is generally interested in the business of providing engineering and operational support services to aircraft manufacturers. Extreme Inc., through the contacts of its owner, received a confirmed order from a wellknown aircraft manufacturer to develop new designs for ducting the air conditioning of their aircraft. For this project, Extreme Inc. needed funds aggregating to $1 million. It was able to convince venture capitalists and was able to obtain funding of $1 million from two Silicon Valley venture capitalists. The expenditures Extreme Inc. incurred in pursuance of its research and development project follow, in chronological order: January 15, 2015: Paid $175,000 toward salaries of the technicians (engineers and consultants) March 31, 2015: Incurred $250,000 toward cost of developing the duct and producing the test model June 15, 2015: Paid an additional $300,000 for revising the ducting process to…

Waterways Corporation is a private corporation formed for the purpose of providing the products and the services needed to irrigate farms, parks, commercial projects, and private lawns. It has a centrally located factory in a U.S. city that manufactures the products it markets to retail outlets across the nation. It also maintains a division that performs installation and warranty servicing in six metropolitan areas. The mission of Waterways is to manufacture quality parts that can be used for effective irrigation projects that also conserve water. By that effort, the company hopes to satisfy its customers, perform rapid and responsible service, and serve the community and the employees who represent them in each community. The company has been growing rapidly, so management is considering new ideas to help the company continue its growth and maintain the high quality of its products. Waterways was founded by Will Winkman, who is the company president and chief executive officer (CEO).…

Flotilla Beam, the owner of the Bay City Boatyard, recently had a brilliant idea. There is a shortage of boat slips in the harbor during the summer. Beam’s idea is to develop a system of “dry slips.” A dry slip is a large storage rack in a warehouse on which a boat is stored. When the boat owner requests, a forklift is used to remove the boat from the dry slip and place the boat in the water. The entire operation requires one hour when a launch reservation is made in advance. The boatyard already has a vacant warehouse, which could be used for this purpose. However, Beam’s idea will require the following capital investment by the boatyard. •   Storage racks: cost, $200,000; useful life, 18 years; MACRS class, 10-year property. •   Forklift: cost, $120,000; useful life, six years; MACRS class, 5-year property. Bay City Boatyard’s tax rate is 35 percent, and its after-tax hurdle rate is 14 percent. Instructions: For each of the boatyard’s proposed capital investments: 1.   Prepare a…

Extreme Inc. is a newly established enterprise. It was set up by an entrepreneur who is generally interested inthe business of providing engineering and operational support services to aircraft manufacturers. ExtremeInc., through the contacts of its owner, received a confirmed order from a well-known aircraft manufacturerto develop new designs for ducting the air conditioning of their aircraft. For this project, Extreme Inc.needed funds aggregating to $1 million. It was able to convince venture capitalists and was able to obtainfunding of $1 million from two Silicon Valley venture capitalists. The expenditures Extreme Inc. incurred inpursuance of its research and development project follow, in chronological order: • January 15, 20X5: Paid $175,000 toward salaries of the technicians (engineers and consultants) • March 31, 20X5: Incurred $250,000 toward cost of developing the duct and producing the test model • June 15, 20X5: Paid an additional $300,000 for revising the ducting process…

Ariatnam, Najafi, and Morones (Journal of Professional Issues in Engineering Education And Practice, 2002) describe an overview of academies on horizontal directional drilling conducted to train engineers and inspectors for the California Department of Transportation. A pretest was administered on the first day prior to any instruction. Instruction and field experience were provided over a 3-day period, followed by a final test administered at the end of the last day. Although the average final test score of 75.27% was higher than the average pretest score of 55.61%, the difference was not significant. a) Identify the type of study described here. b) What is the purpose of administering a pretest?

Galbraight is the CEO and founding partner of JPA, a sizable asset management company with locations all over the world. The company serves a wide range of international institutional clients, including state-owned businesses operated by government officials. Galbraight launches a "Client Internship Program" that enables clients to recommend applicants for internships at JPA in an effort to strengthen client ties. Referrals from this program are taken into consideration for positions outside of the company's standard demanding and competitive hiring procedure. The bigger the JPA client, the more probable it is that a reference from that client will be hired into a rewarding internship position that will advance their career. More than 200 family members and friends of important executives from several of JPA's clients are hired by the company, including family members and friends from numerous government organizations with which JPA has links in investment banking or asset management.…