Ivey Publishing

Cost Accounting: A Managerial Emphasis

Horngren, C.T., Foster, G., Datar, S.M., Teall, H.D., Gowing, M.P.,5/e (Canada, Pearson Education, 2010)
Prepared By Dan Woodward, Professor
Chapter and Title Chapter Matches: Case Information
Chapter 1:
The Accountant’s Role in the Organization

PHIL CHAN (A)
Paul W. Beamish, Jean-Louis Schaan

Product Number: 9B08M038
Publication Date: 4/18/2008
Length: 8 pages

The case deals with a scam that has been run out of Nigeria since 1990. In it, foreign companies are approached for their assistance in facilitating an international transfer of funds in order to receive a very large but unearned commission. In the case, a Hong Kong-based manager who is travelling to Nigeria is unaware that he is walking into a situation where his company is about to be cheated. The objective of the case is to raise the issue of ethics in the conduct of international business. A follow-up case (9B08M039) is available.

Teaching Note: 8B08M38 (10 pages)
Industry: Administrative, Support, Waste Management and Remediation Services
Issues: Negotiation; Human Behaviour; Ethical Issues; Personal Values
Difficulty: 4 - Undergraduate/MBA


Chapter 2:
An Introduction to Cost Terms and Purposes

NORTH BILLINGTON GOLF AND COUNTRY CLUB
Mary Gillett, Stephen Rene Frey

Product Number: 9B08B014
Publication Date: 1/7/2009
Revision Date: 12/7/2011
Length: 14 pages

The chief financial officer (CFO) of North Billington Golf and Country Club was reviewing the financial statements prepared by the auditors. At the upcoming annual general meeting, Parkinson was expected to address the membership on the future financial health of the golf club. In addition to having the financial statements ready, he wanted to compare the financial results with those of other golf courses.

Teaching Note: 8B08B14 (8 pages)
Industry: Arts, Entertainment, Sports and Recreation
Issues: Financial Reports/Disclosure; Accounting Principles; Performance Measurement; Cash Flow; Financial Analysis
Difficulty: 4 - Undergraduate/MBA



CREDIT VALLEY GOLF AND COUNTRY CLUB
Mary Gillett, Stephen Rene Frey

Product Number: 9B08B013
Publication Date: 1/7/2009
Length: 4 pages

Credit Valley Golf and Country Club (Credit Valley), a private golf course, would be having their annual general meeting very soon. The general manager of Credit Valley and the superintendent felt that the most pressing issue was a change to the method of irrigation being used by the golf course. This change was made necessary by newly passed government regulations. The general manager and superintendent had to prepare a proposal for the annual general meeting to convince the board of directors and the club members that a new pump house was the most viable option.

Teaching Note: 8B08B13 (7 pages)
Industry: Arts, Entertainment, Sports and Recreation
Issues: Capital Investment; Equipment Selection/Maintenance; Financial Analysis; Capital Budgeting; Government and Business; Cost/Benefit Analysis
Difficulty: 4 - Undergraduate/MBA



BRITISH AIRWAYS' ADOPTION OF IFRS 2005
David J. Sharp, Matt Fenton

Product Number: 9B08B003
Publication Date: 8/14/2008
Length: 15 pages

An investment adviser has to evaluate the consequences for a client's pension fund of British Airways' balance sheet disclosure of a write-down of £ 1.3 billion associated with their unfunded pension liability, resulting from the company's required adoption of International Financial Reporting Standards in 2005.

Teaching Note: 8B08B03 (5 pages)
Industry: Transportation and Warehousing
Issues: Accounting Standard Setting; Financial Management; Pensions; Valuation
Difficulty: 4 - Undergraduate/MBA


Chapter 3:
Cost-Volume-Profit Analysis

CFM ATTACHMENTS LTD.
Larry Wynant, Ken Mark

Product Number: 9B09N002
Publication Date: 1/20/2009
Revision Date: 2/9/2011
Length: 14 pages

The president of Vancouver-based CFM Attachments Ltd. (CFM) is putting together a management buyout of his company. The president, who has had experience creating and selling a company in a related industry, is trying to determine how to value a potential purchase of CFM from the company's founder. As CFM is a privately-owned company, the president is trying to place a value on the company based on historical financials, a group of comparative firms, and a profit and cash flow forecast by the management team.

Teaching Note: 8B09N02 (11 pages)
Industry: Manufacturing
Issues: Mergers & Acquisitions; Financial Strategy; Financial Analysis
Difficulty: 4 - Undergraduate/MBA



GOODWIN WEALTH MANAGEMENT: AN ACQUISITION OPPORTUNITY
Colette Southam, Lisa Conway

Product Number: 9B08N029
Publication Date: 12/8/2008
Length: 13 pages

On November 30, 2007, the chief executive officer (CEO) of Goodwin Wealth Management (Goodwin), decided to hire a consultant to make an assessment of his current situation. Recently, several firms had expressed interest in acquiring Goodwin. The CEO knew he would have to decide whether to consider these offers or not very soon in order to avoid a hostile bidding situation. If the CEO did decide to consider an acquisition, he would have to act quickly in order to take advantage of the current stock's high price. Further complicating the decision was the fact that Goodwin had been built by the CEO's father, George, who would try to influence the decision-making process. The CEO wanted to do what was best for the company while protecting his family's reputation. He awaited the advice from the consultant.

Teaching Note: 8B08N29 (9 pages)
Industry: Finance and Insurance
Issues: Financial Analysis; Business Valuation; Valuation; Mergers & Acquisitions
Difficulty: 4 - Undergraduate/MBA



INDUSTRIAL ACCESSORIES LTD.
James E. Hatch, Ken Mark

Product Number: 9B08N024
Publication Date: 11/4/2008
Length: 11 pages

The president of Industrial Accessories Ltd. (IAL) was preparing for a meeting to consider a management buyout of IAL. IAL was a privately owned maker of attachments for construction vehicles based in British Columbia, Canada. IAL was founded in 1970 by Gerald Stone, now chairman and CEO of IAL. Stone had decided to sell IAL because of health problems. Because he had no suitable heirs to take on leadership of the company, the president and three other senior managers were considering a buyout strategy. Students must size up the acquisition, a place value on the company and propose a financing plan for the acquisition.

Teaching Note: 8B08N24 (11 pages)
Industry: Manufacturing
Issues: Business Valuation; Valuation; Financial Analysis; Strategic Size-up; Financing Plans; Cash Flow Analysis
Difficulty: 4 - Undergraduate/MBA


Chapter 4:
Job Costing

BODY BENEFITS
Elizabeth M.A. Grasby, Neeta Khera

Product Number: 9B05B001
Publication Date: 3/7/2005
Revision Date: 9/24/2009
Length: 7 pages

The proprietor of a day spa must decide whether to purchase a microdermabrasion machine. This differential analysis case will test students' abilities to identify those costs that are recurring cash flows and those costs that are investments; give practice calculating working capital investments; differentiate between relevant and non-relevant costs for a differential analysis and test students on their ability to conduct a sensitivity analysis.

Teaching Note: 8B05B01 (12 pages)
Industry: Other Services
Issues: Growth Strategy; Break-Even Analysis; Return on Investment; Management Accounting
Difficulty: 1 - Introductory



THE BARAKAT
Elizabeth M.A. Grasby, Jennifer Callahan

Product Number: 9B06B013
Publication Date: 6/21/2006
Revision Date: 9/15/2009
Length: 6 pages

The owner of a restaurant serving Middle Eastern cuisine realizes the need for a bigger location due to extreme customer congestion. He is contemplating moving the restaurant to a new location that would require $255,000 of renovations in order to keep pace with his growing consumer base. Students are asked to: 1) identify those items relevant to the decision and categorize them as either recurring or one-time flows; 2) understand that recurring flows consist of both fixed and variable costs; 3) identify investments, including working capital accounts; 4) calculate return on investment and 5) make a decision based on both qualitative and quantitative analysis.

Teaching Note: 8B06B13 (5 pages)
Industry: Accommodation & Food Services
Issues: Expansion; Cash Flow Analysis; Return on Investment; Investments
Difficulty: 1 - Introductory



FOXY ORIGINALS - EXPANSION INTO THE U.S. MARKET
Elizabeth M.A. Grasby, Nina Gupta

Product Number: 9B07B004
Publication Date: 5/15/2007
Revision Date: 4/28/2014
Length: 9 pages

A successful Canadian jewelry manufacturer and distributor contemplates entering the U.S. market and how best to do it. Students are required to: 1) identify costs relevant to the decision and categorize them as either investments, fixed costs or variable costs; 2) calculate unit contribution, contribution-margin ratio and weighted-average-contribution-margin rates; 3) perform a breakeven analysis and interpret its meaning using relevant parameters; 4) project profitability of a chosen distribution strategy; and 5) perform sensitivity analysis with respect to the expected sales level. Students are required to understand and analyse the opportunities and risks associated with entering a new geographic market and combine their qualitative and quantitative analysis when deciding which distribution strategy to pursue.

Teaching Note: 8B07B04 (14 pages)
Industry: Manufacturing
Issues: Distribution; Doing Business in the U.S.; Profitability Analysis; Management Accounting
Difficulty: 1 - Introductory


Chapter 5:
Activity-Based Costing and Activity-Based Management

PART KING, INC.
Mary Gillett, Lindsay Brock

Product Number: 9B08B001
Publication Date: 4/1/2008
Length: 10 pages

A newly appointed operations manager was expected to provide his expertise in the planning, launch and ongoing operations for three corporately-owned Part King stores, the first of which was scheduled to open in December 2005. The operations manager wondered if moving to a corporate model made sense at all or whether it was better to retain the franchise structure that was already in place. He was particularly concerned about how best to motivate the managers of a corporate-owned store given that they did not share in its ownership. Were there some components of the control system that was currently in place in the franchise store model that would also be appropriate for the corporate-owned store model that was in the works? Were there some components of the existing control system that needed improvements as well?

Teaching Note: 8B08B01 (8 pages)
Industry: Retail Trade
Issues: Transfer Pricing; Incentives; Control Systems; Budgeting
Difficulty: 4 - Undergraduate/MBA



ARVIND MILLS: RE-EVALUATING PROFITABILITY
Murray J. Bryant, Rajeev Khera

Product Number: 9B04B008
Publication Date: 8/10/2004
Revision Date: 10/8/2009
Length: 11 pages

Arvind Mills, a large Indian textile and garment manufacturer, has to assess the costs of a large order, as a basis for a price quotation. The company is in a significant loss position. The textile industry in India is constrained by government regulations and the industry is critical as both an export earner and a major employer in the economy. However, the industry is losing share to China and must change to meet that threat. The vice-president of operations must assess the costs associated with the order, including an assessment whether to use the traditional cost system or the customer and manufacturing based activity cost system. The decision is also strategic as this order is at the core of the company's new strategy to be both a designer and manufacturer.

Teaching Note: 8B04B08 (2 pages)
Industry: Manufacturing
Issues: Pricing; Internationalization; Government Regulation; Cost Systems
Difficulty: 4 - Undergraduate/MBA



FLUID ANALYZERS INC
Elizabeth M.A. Grasby, Melissa Moszcelt

Product Number: 9B04B004
Publication Date: 5/14/2004
Revision Date: 10/7/2009
Length: 14 pages

Fluid Analyzers Inc. is a small manufacturer and distributor of hydraulic fittings and has recently developed a new product, the SV pushbutton. The president must decide on a number of issues relating to the product, including target market, manufacturing process, and product features. Using managerial and financial analysis methods he must develop an overall business strategy, incorporating company goals and capabilities with industry trends.

Teaching Note: 8B04B04 (21 pages)
Industry: Manufacturing
Issues: Growth Strategy; Cost Accounting; Market Entry; Financial Planning
Difficulty: 1 - Introductory


Chapter 6:
Master Budget and Responsibility Accounting

ST. CLEMENT'S SCHOOL
Mary Gillett, Jeana Poon, Kelly McKenna

Product Number: 9B07B012
Publication Date: 10/4/2007
Revision Date: 10/30/2007
Length: 9 pages

The principal of St. Clement's School was considering a potential expansion to the school's facilities. There were many issues for the principal to consider including how to fund the expansion, the impact on the school's programs, and the impact on the school of increased enrollments. Most importantly, she had to consider the impact of an expansion on the distinct culture of the school. This case is an introductory capital budgeting example set in a non-profit organization rich in context.

Teaching Note: 8B07B12 (7 pages)
Industry: Educational Services
Issues: Non-Profit Organization; Funding; Capital Budgeting; Capital Investment
Difficulty: 4 - Undergraduate/MBA



LAURENTIAN BAKERIES (ABRIDGED)
David C. Shaw, Stephen R. Foerster, Mary Gillett, Rob Barbara

Product Number: 9B06B027
Publication Date: 7/20/2006
Revision Date: 9/15/2009
Length: 10 pages

The vice-president of operations must submit a valuation and recommendation to expand his plant to handle a doubling of sales over the next three years. Students will have to understand the process review for capital allocation in this large corporation in order to make their recommendation, as well as complete a discounted cash flow.

Teaching Note: 8B06B27 (8 pages)
Industry: Manufacturing
Issues: Planning; Capital Budgeting
Difficulty: 4 - Undergraduate/MBA



WINSTON & HOLMES
Mary Gillett, Jason Landau

Product Number: 9B06B007
Publication Date: 5/12/2006
Revision Date: 9/15/2009
Length: 10 pages

The founder and president of Winston & Holmes must decide whether or not to expand the Yorkville location. Winston & Holmes is a fine tobacco and men's accessories shop. This year has proven to be a breakout year for the company and management had begun to question whether the Yorkville location needed to be expanded. The founder and president realized that the decision must be made soon, so that the upcoming Christmas sales season would not be affected by any construction.

Teaching Note: 8B06B07 (8 pages)
Industry: Retail Trade
Issues: Capital Budgeting; Cost/Benefit Analysis; Expansion
Difficulty: 4 - Undergraduate/MBA


Chapter 7:
Flexible Budgets, Variances and Management Control: 1

LONDON PUBLIC LIBRARY
Vaughan S. Radcliffe, Ian Nichol

Product Number: 9B07B005
Publication Date: 5/6/2008
Length: 14 pages

The chief executive officer (CEO) of the London Public Library (LPL) had developed and had begun to implement a strategic plan to improve the LPL. The strategic plan was based on a balanced scorecard. The four perspectives measured by the balanced scorecard were: the community perspective, the internal processes perspective, the organizational readiness perspective and the financial perspective. With two years before the deadline to achieve the plan, the CEO had to decide on what she would focus next.

Teaching Note: 8B07B05 (3 pages)
Industry: Public Administration, Social Advocacy Organizations
Issues: Development of Balanced Scorecard; Financial and Nonfinancial Performance Measures; Performance Assessment; Management Control; Performance Measurement; Accountability in the Public Service; Performance Evaluation; Management Accounting; Accounting Methods
Difficulty: 4 - Undergraduate/MBA



NEAL & MASSY: EVALUATING SHAREHOLDER VALUE ADDED
Murray J. Bryant, Ken Mark

Product Number: 9B06B028
Publication Date: 11/6/2006
Revision Date: 9/15/2009
Length: 23 pages

In April 2006, Bernard Dulal-Whiteway, CEO of Neal & Massy Holdings Ltd., was thinking about the company's strategy going forward. When he became CEO in 2000, Dulal-Whiteway had instilled operating discipline through the implementation of Shareholder Value Added (SVA) as the key financial metric. Although this had contributed positively to Neal & Massy's success, there were several recent examples of poor decision-making. Dulal-Whiteway is considering adding other metrics in order to ensure the company's continued success.

Teaching Note: 8B06B28 (5 pages)
Industry: Manufacturing
Issues: Management Accounting; Control Systems; Economic Value Added; Valuation; Performance Evaluation
Difficulty: 4 - Undergraduate/MBA



ENTERPRISE RESOURCE PLANNING SOFTWARE - ONGOING MAINTENANCE COST BENEFIT ANALYSIS
Mike Canniff

Product Number: 9B06E012
Publication Date: 3/16/2007
Revision Date: 9/17/2009
Length: 14 pages

At this point, the Oracle acquisition of PeopleSoft in 2005 seems like ancient history (at least in technology years). In fact, the PeopleSoft acquisition is not even Oracle's latest major acquisition (Siebel was acquired in September 2005). One of the primary reasons that Oracle acquired PeopleSoft was to gain access to the 10,000+ customer base of PeopleSoft (and JD Edwards), which provides more than $1 billion in annual revenue. This customer base is a gift that keeps on giving in the form of a lucrative maintenance stream. This case study discusses options that PeopleSoft customers and, by extension, other enterprise software owners pursue to minimize enterprise resource planning (ERP) ongoing costs of ownership. The case encourages students to evaluate several criteria that can be used to lower ERP costs. There are no material requirements to run the case (other than Internet access).

Teaching Note: 8B06E12 (7 pages)
Industry: Public Administration
Issues: Outsourcing; Cost Control; Management Decisions; Enterprise Resource Planning; Strategic Balance; Vendor Selection
Difficulty: 4 - Undergraduate/MBA


Chapter 8:
Flexible Budgets, Variances and Management Control: 2

ONTARIO FORMULARY
Gregory S. Zaric, Stephen Rene Frey

Product Number: 9B06E001
Publication Date: 11/28/2005
Revision Date: 9/17/2009
Length: 7 pages

A doctor is preparing for an upcoming meeting of the Ontario Drug Quality and Therapeutics committee. At this meeting the committee would need to make a decision about adding six new drugs to the Ontario formulary. The doctor needed to review the clinical and economic evidence on each drug in order to take a position on each at the meeting. The case introduces students to the concept of formularies and presents six representative cases for class discussion.

Industry: Health Care Services
Issues: Cost Control; Cost/Benefit Analysis; Drugs; Health Administration
Difficulty: 4 - Undergraduate/MBA



RBC INVESTMENTS: PORTFOLIO PLANNING INITIATIVE
Derrick Neufeld

Product Number: 9B05E005
Publication Date: 4/11/2005
Revision Date: 10/20/2010
Length: 11 pages

The newly hired head of Strategic Resources Planning and Management at Royal Bank of Canada Investments (RBCI) must develop a dashboard mechanism for strategically assessing and managing RBCI's non-interest expenses, excluding brokerage fees associated with providing value-added service to clients. After a week of analysis, two things became apparent; first, the four major business units within RBCI were operating independently, neither collaborating on projects nor sharing information. Second, most of the non-interest expenses spent was related to information technology projects. Consider that RBCI was spending nearly $700,000 per day on service delivery, the senior management team was extremely eager to see what the head of Strategic Resources Planning and Management would propose. This case presents information technology portfolio management challenges facing large organizations, and challenges students to develop performance metrics that will be useful at the most senior levels of the organization.

Teaching Note: 8B05E05 (18 pages)
Industry: Finance and Insurance
Issues: Portfolio Management; Planning; Information Systems; Cost Control
Difficulty: 4 - Undergraduate/MBA


Chapter 9:
Income Effects of Alternative Inventory Costing Methods

NOTE ON MATERIAL REQUIREMENTS PLANNING
Chris J. Piper

Product Number: 9B07D005
Publication Date: 2/26/2007
Length: 8 pages

The note on material requirements planning (MRP) explains MRP at an introductory level, indicates some of the essential ingredients for success, and suggests the implications for MRP adopters who are unable to provide them.

Industry: Manufacturing
Issues: Production Scheduling; Materials Management; Inventory Planning/Control; Material Requirements Planning
Difficulty: 4 - Undergraduate/MBA



WILKINS, A ZURN COMPANY: AGGREGATE PRODUCTION PLANNING
Eric Olsen, Carol Prahinski, Jenni Denniston

Product Number: 9B06D017
Publication Date: 10/12/2006
Revision Date: 9/16/2009
Length: 11 pages

The general manager of the Wilkins plant in Paso Robles, California has received instructions from head office to reduce inventory by 30 per cent in the next quarter. Although inventory had been accumulating over the past years, this has been seen as a benefit to the company for a couple of reasons. One is that the cost of raw materials has risen in the past year. The second is that the company has a policy of no layoffs, so having inventory in stock allows the company to minimize the use of overtime and temporary workers. The general manager wondered whether revising the production planning process would be enough to solve Wilkins' inventory problems.

Teaching Note: 8B06D17 (22 pages)
Industry: Manufacturing
Issues: Manufacturing Strategy; Inventory Planning/Control; Logistics; Operations Management
Difficulty: 4 - Undergraduate/MBA


Chapter 10:
Cost Information for Decisions

ALEX SHARPE'S PORTFOLIO
Colette Southam

Product Number: 9B08N020
Publication Date: 7/29/2008
Revision Date: 5/10/2017
Length: 4 pages

Alex Sharpe's Portfolio provides an introduction to the Capital Asset Pricing Model (CAPM), portfolio diversification and risk management. Sharpe currently holds the Vanguard 500 Index Fund, but is considering a more active management strategy. Students must assess the risk of the two stocks she is considering adding to her portfolio. Students are provided with monthly stock returns and must calculate the standard deviations of the individual stocks and of the portfolios when one of the stocks is added to it. Students must calculate the stock's beta using regression and will learn that beta is the appropriate measure of risk to use in decision making since risk-averse investors do not hold stocks in isolation.

Teaching Note: 8B08N20 (7 pages)
Industry: Finance and Insurance
Issues: Regression Analysis; Portfolio Management; Funds Management; Risk Management
Difficulty: 3 - Undergraduate



SPRINGBANK DRIVE
Gregory S. Zaric, Leo MacDonald

Product Number: 9B06E006
Publication Date: 12/15/2006
Revision Date: 9/17/2009
Length: 6 pages

The City of London was expropriating a portion of Springbank Drive as part of a project to widen the road between Wharncliffe Road and Wonderland Road. The owner of Canning Consultants Inc. was retained by the city to assess the resultant property value loss for the affected residents. The consultant had assembled a database of residential sales along with various property attributes, and had to determine how to proceed in calculating appropriate compensation for the taking. This case is appropriate in a module on multiple linear regression models.

Teaching Note: 8B06E06 (9 pages)
Industry: Real Estate and Rental and Leasing
Issues: Quantitative Analysis; Regression Analysis; Valuation; Real Estate; Linear regression
Difficulty: 4 - Undergraduate/MBA


Chapter 11:
Decision Making and Relevant Information
Chapter 12:
Pricing Decisions, Product Profitability Decisions and Cost Management

WESTMOUNT RETIREMENT RESIDENCE
Mary Gillett, Nicole Shomair

Product Number: 9B08B002
Publication Date: 6/30/2008
Revision Date: 6/16/2009
Length: 10 pages

The administrator of the Westmount Retirement Residence is concerned about the current cost accounting system. The administrator is not clear on how much each service offered was truly costing, and therefore charged each resident the same price per month regardless of their needs. In the past, the majority of patients demanded similar services, and therefore this pricing and costing system was appropriate. However, with demographic changes to the population, some residents required intense medical care, while others were healthy and fit and required less care. A new pricing model had to be developed that reflected both the size of suite inhabited and the level of medical care and service required by each individual patient.

Teaching Note: 8B08B02 (8 pages)
Industry: Other Services
Issues: Cost Systems; Pricing; Cost Allocations
Difficulty: 4 - Undergraduate/MBA


Chapter 13:
Strategy, Balanced Scorecard and Strategic Profitability Analysis

EASTERN TALON TRANSPORT
Elizabeth M.A. Grasby, Andrew Sarta

Product Number: 9B05B010
Publication Date: 2/6/2006
Revision Date: 4/19/2016
Length: 7 pages

The assistant vice-president of strategic development for a trucking company, must investigate the feasibility of moving dispatchers within the long-haul operations department in Quebec, to the head office building in Mississauga, Ontario. Students are given practice using differential analysis as an analytical tool, and are exposed to a work environment involving unions and labor issues within a unionized workforce.

Teaching Note: 8B05B10 (8 pages)
Industry: Transportation and Warehousing
Issues: Investment Analysis; Financial Analysis; Cost/Benefit Analysis; Centralization
Difficulty: 1 - Introductory


Chapter 14:
Cost Allocation and Revenues

DELOITTE: ON LIVENT INC.
Murray J. Bryant, Ken Mark

Product Number: 9B08B006
Publication Date: 12/9/2008
Length: 7 pages

In December 1997, an audit partner at Deloitte was required to render an opinion on five separate but related issues arising out of an on-going working relationship with Livent, a Canadian live entertainment firm. Each issue could be treated in multiple ways, and there seemed to be no immediate clear-cut resolution to each. Issues included: assessing impacts of side agreements between Livent and a real-estate development firm; appropriateness of booking revenues for theatre-naming rights in a particular fiscal quarter; auditing of pre-production costs; accounting for proceeds of sale of receivables to related party; and evaluating the audit of accounts payable. It was crucial to resolve each of the issues within a few days in order to complete the file to meet filing requirements. The auditor must determine the best advice for each issue while understanding that Deloitte had to protect its reputation, yet still grow its revenues in the face of aggressive competition for its business.

Teaching Note: 8B08B06 (3 pages)
Industry: Administrative, Support, Waste Management and Remediation Services
Issues: Conflict Resolution; Accounting Environment; Leadership; Ethical Issues; Accounting Principles; Accounting - Tax
Difficulty: 4 - Undergraduate/MBA


Chapter 15:
Cost Allocation: Joint Products and Byproducts

CADIM: THE CHINA AND INDIA REAL ESTATE MARKET ENTRY DECISIONS
Stephen R. Foerster, Marc Folch

Product Number: 9B09N003
Publication Date: 1/30/2009
Revision Date: 7/6/2009
Length: 17 pages

The president and chief operating officer of Cadim, the real estate arm of the Caisse de Dépôt et Placement du Québec, Canada's largest pension fund management firm, was considering whether Cadim should enter India, China or both on a long-term basis to diversify its global real estate holdings and take advantage of the growth these two countries were experiencing. The fund's investment would potentially amount to hundreds of millions of dollars and could lead to substantial returns; however, these investments carried considerable risks. The case introduces many of the issues involved with managing an international portfolio of real estate and provides a detailed overview of the business environment and culture of both China and India. In doing so, the case exposes students to the complicated nature of regional risk assessment and the challenges of doing business in developing countries. Students must assess whether the complexity and risk levels involved with entering a new developing country are worth the potential returns.

Teaching Note: 8B09N03 (9 pages)
Industry: Real Estate and Rental and Leasing
Issues: China; International Strategy; International Joint Venture; Investments
Difficulty: 4 - Undergraduate/MBA


Chapter 16:
Revenue, Sales Variances, and Customer Profitability Analysis

SAN FRANCISCO COFFEE HOUSE: AN AMERICAN STYLE FRANCHISE IN CROATIA
Ilan Alon, Mirela Alpeza, Aleksandar Erceg

Product Number: 9B08A013
Publication Date: 8/14/2008
Revision Date: 4/20/2010
Length: 10 pages

On their return to Croatia following a six-year visit to the United States, a couple has decided to open their own coffee house, one that is new to Croatia — a California-style coffee house that offers the quality, service, product assortment, ambiance, and efficiency found in sophisticated coffee shops in developed markets, and all for a locally affordable price. The major challenge faced by the couple is how to grow. Specifically, should they consider franchising over organic growth? If so, how should they go about franchising in a country where the market is developing and where franchising is under-regulated, underdeveloped, and misunderstood?

Teaching Note: 8B08A13 (10 pages)
Industry: Accommodation & Food Services
Issues: Business Development; Retail Marketing; Corporate Governance; Human Resources Management; Franchising; Brands
Difficulty: 2 - Intro/Undergraduate



DELL INC. - INVESTMENT STRATEGY
Larry Wynant, Ken Mark

Product Number: 9B08N026
Publication Date: 10/23/2008
Revision Date: 2/1/2013
Length: 14 pages

At the start of August 2008, Dell Inc. (Dell) seems to be at a critical juncture. Michael Dell's return a year and a half ago has brought significant change to the company, including a focus on growing market segments, a shift in the company's distribution strategy, and an emphasis on design in Dell's product lineup. Despite these changes, Dell's stock price has lost value since Michael's return. A portfolio manager is trying to assess if Michael Dell's return to the helm of Dell Inc. and the company's shift in distribution strategy will turn around the company's stock price. To support his analysis, the portfolio manager has asked his team to assemble comparative financial data on Dell and its key competitors. The portfolio manager wants to know if he should buy, hold or sell Dell's shares. There are three teaching objectives for this case: assess financial performance using financial statements and financial ratios; identify cash flow and profit drivers; and identify the determinants of value and stock price.

Teaching Note: 8B08N26 (7 pages)
Industry: Manufacturing
Issues: Financial Strategy; Forecasting; Financial Analysis
Difficulty: 5 - MBA/Postgraduate



INFO-TECH RESEARCH GROUP
Elizabeth M.A. Grasby

Product Number: 9B05B002
Publication Date: 3/7/2005
Revision Date: 9/24/2009
Length: 8 pages

The president and chief executive officer of Info-Tech Research Group must determine the pricing and promotional strategies for the company's newest product offering. This case allows students to use differential analysis as a tool to aid in their decision. Students are expected to perform a qualitative analysis based on the fit of Info-Tech's new product offering within the competitive marketplace and its potential customers; identify those items relevant to the decision and categorize them as either recurring cash flows or one-time cash flows; understand that the recurring cash flows consist of both variable costs and fixed costs and to recognize the difference; identify those items which are investments, including working capital accounts; apply exchange rates so that all figures in the analysis are in the same currency; calculate return on investment and payback ratios; recognize the need for and perform a sensitivity analysis on the projected sales levels; and make a decision based on both qualitative and quantitative analysis.

Teaching Note: 8B05B02 (6 pages)
Industry: Administrative, Support, Waste Management and Remediation Services
Issues: Information Technology; New Products; Return on Investment; Management Accounting
Difficulty: 1 - Introductory


Chapter 17:
Process Costing

EXCELERITE INTEGRATED SYSTEMS, INC. (EIS)
Wesley Marple

Product Number: 9B08N006
Publication Date: 3/6/2008
Revision Date: 2/26/2010
Length: 6 pages

A sales representative for Monster Computer Corporation was working with the head of data processing of a major account to develop a financial justification for the company to purchase $9 million of computer and storage hardware and other peripherals, which would replace an existing data processing installation. The potential customer had estimated the savings to be achieved by the new equipment. Working with this estimate and financial information about the client company, the sales representative must undertake a rigorous capital budgeting analysis to help the potential customer sell the project to the financial people in the company. The case provides students with an opportunity to analyze a simple capital expenditure. They are required to develop a discount rate, based upon costs of funds, and to utilize that discount rate to value the cash flows expected. Information is provided about the likelihood of receiving the expected cash flows, so that expected NPV and IRR values may be determined. There is ample room for discussion about the costs of debt and equity to use the weights to be applied. Additionally, the affect of expected inflation must be factored into the analysis.

Teaching Note: 8B08N06 (8 pages)
Issues: Taxation; Cost of Capital; Capital Budgeting; Depreciation; Northeastern
Difficulty: 4 - Undergraduate/MBA


Chapter 18:
Quality and JIT
Chapter 19:
Cost Management Quality Time and Theory of Constraints
Chapter 20:
Inventory Management, Just-in-Time, and Backflush Costing

SHOPSTER.COM
Malcolm Munro, Sid L. Huff

Product Number: 9B07E005
Publication Date: 8/21/2007
Revision Date: 9/27/2007
Length: 18 pages

Shopster.com is a Calgary-based e-business company whose business is to assist other individuals or companies in setting up their own retail transactional websites. Shopster differs significantly from ordinary website developers in that retailers are able to select from a huge inventory of saleable products, through Shopster's network of goods providers. Shopster also provides software tools, and expertise, to allow anyone wishing to create an online retail store to do so quickly and easily. Shopster's business has done well to date, but there are plenty of operational challenges ahead. As well, the principals would like to "raise the bar" substantially, to something they refer to as "Shopster 2.0", the specifics of which are still at a formative stage. The Shopster case provides an interesting example of a small but rapidly growing Canadian company with an innovative business model and big dreams for the future.

Teaching Note: 8B07E05 (9 pages)
Industry: Administrative, Support, Waste Management and Remediation Services
Issues: Supply Chain Management; E-Business Models; E-Commerce; Virtual Business
Difficulty: 4 - Undergraduate/MBA


Chapter 21:
Capital Budgeting and Cost Analysis

SOMBRERO: PROPOSED FRUIT JUICE OUTLET
John McLellan

Product Number: 9B09B001
Publication Date: 1/12/2009
Length: 3 pages

An entrepreneur must decide whether to proceed with the business plan for his startup business. This mini case exercise presents all startup costs to open a fruit juice outlet in a mall in Al Ain, Abu Dhabi Emirate, United Arab Emirates.

Teaching Note: 8B09B01 (3 pages)
Industry: Accommodation & Food Services
Issues: Costs; Customer profitability; Startups; Profitability Analysis
Difficulty: 1 - Introductory



CANADIAN FIREARMS PROGRAM
Derrick Neufeld, Zeying Wan

Product Number: 9B06E007
Publication Date: 2/16/2006
Revision Date: 9/17/2009
Length: 12 pages

The Canadian firearms program initially was established to set up a shared database. However, increasing costs of the firearms program is a concern for a number of Canadians. Should the federal government continue with the program, de-escalate or cancel the program. The case requires students to simultaneously evaluate the issues of the database design, software outsourcing, IS project management and change management. It can also be used to cover cost analysis, and political influences in decision-making.

Teaching Note: 8B06E07 (7 pages)
Industry: Public Administration
Issues: Politics; Cost Control; Information Systems; Project Management
Difficulty: 4 - Undergraduate/MBA


Chapter 22:
Capital Budgeting: A Closer Look

CANADA'S TAX REGIME: COMPLEXITY UNDERMINES COMPETITIVENESS
Thomas O'Brien, Kim Wood

Product Number: 9B08TE10
Publication Date: 3/1/2008
Length: 10 pages

A tax regime that hurts a company is a tax regime that hurts a country. A simpler regime and one that is less costly will, in the end, benefit all.

Issues: Government and Business; Government Regulation; Taxation




MIA, PHILIPPINES
Jim Kayalar

Product Number: 9B09M016
Publication Date: 2/9/2009
Length: 20 pages

The newly appointed country director of MIA Philippines, a non-profit organization with a mandate to alleviate poverty in developing countries, is faced with the challenge of designing and managing a development assistance project that would establish a go-to-market supply chain for a remote Filipino fishing village. The country director has to enter a new country, launch the project, deal with the constraints of a foreign culture, manage the expectations of major stakeholders whilst trying to manage a multi-cultural team and conclude the project on time. The value of the case lies in the realistic assessment of stakeholders' motivation, their capabilities and assets, and project constraints during the design and implementation stages. Value chain analysis, value added analysis and stakeholder analysis are used to assess the applicability of project design, impact and long term success.

Teaching Note: 8B09M16 (11 pages)
Industry: Social Advocacy Organizations
Issues: Value Chain; Cross Cultural Management; Project Management; Project Design/Development
Difficulty: 4 - Undergraduate/MBA


Chapter 23:
Management Control Systems, Transfer Pricing, and Multinational Considerations

GOEDEHOOP: WHEN SOCIAL ISSUES BECOME STRATEGIC
Margaret Sutherland, Verity Hawarden

Product Number: 9B08M067
Publication Date: 12/15/2008
Length: 17 pages

This case chronicles a change process to counteract the epidemic of HIV/AIDS on a coalmine in South Africa that impacts the sustainability of the organization. The case describes the business case for dealing with the problem and the sequence of events that were instituted. It illustrates the type of leadership activities needed to deal with a compelling environmental force impacting business. It shows how a wide range of stakeholders needs to be involved and systems and practices instituted for sustainable change to be implemented. It raises the question of the role of business in society. The case also provides insights into doing business in emerging economies. The challenge at the end of the case is how to roll out (replicate) the intervention into other divisions of a large multinational.

Teaching Note: 8B08M67 (8 pages)
Industry: Mining, Quarrying, and Oil and Gas Extraction
Issues: Health; Cost/Benefit Analysis; Ethical Issues; Change Management; Leadership; Human Resources Management; Triple Bottom-line Reporting; Impact of HIV/AIDS on Business; Emerging Markets; GIBS
Difficulty: 5 - MBA/Postgraduate



ADEPT CHEMICAL INC.
Elizabeth M.A. Grasby, Lindsay Brock

Product Number: 9B08N019
Publication Date: 9/18/2008
Revision Date: 4/25/2014
Length: 12 pages

The chief executive officer of a chemical company supplying cleaning and hygiene products is preparing a bid worth $3 million in new business. Students are asked to analyze the industry, construct and interpret a statement of cash flows, calculate and interpret financial ratios, perform a differential analysis, project a cash budget, calculate sales breakeven and project a statement of earnings and a balance sheet.

Teaching Note: 8B08N19 (17 pages)
Industry: Manufacturing
Issues: Cash Budgeting; Competing with Multinationals; Break-Even Analysis; Capital Investment
Difficulty: 1 - Introductory



STONE GROUP CORP.
Alan Jin

Product Number: 9B02B001
Publication Date: 4/8/2002
Revision Date: 10/29/2009
Length: 9 pages

Stone Group Corp., one of the largest electronics manufacturers and distributors in China, practices transfer pricing, an allocation process that assigns costs, sales revenue and gross profits to each of its five divisions. When a customer approaches the company with an order and requests a recommendation for a multimeter model, the general manager of the Instruments Division is asked to quote a transfer price for the multimeters. He must decide whether to sell some of his stock to another Stone division (losing the sales revenue, but perhaps gaining the gross profit needed to meet the division's monthly profit quota) or to keep the product in stock for possible sales (and greater revenue and profit) during the company's fourth quarter.

Teaching Note: 8B02B01 (4 pages)
Industry: Manufacturing
Issues: China; Performance Evaluation; Accounting Methods; Accounting Principles; Transfer Pricing
Difficulty: 5 - MBA/Postgraduate


Chapter 24:
Performance Measurement, Compensation and Multinational Consideration

HUMAN RESOURCE MANAGEMENT IN MULTINATIONAL BANKS IN TANZANIA
Paul W. Beamish, Aloysius Newenham-Kahindi

Product Number: 9B07C040
Publication Date: 10/30/2007
Length: 18 pages

The case examines how the best practices of two banks were organized and managed to provide financial services to a small niche of foreign customers in the mining, tourism and construction sectors in Tanzania. The two banks claimed to be similar in many ways. They both were from countries whose economies were run broadly on neo-liberal lines, in that there was little state intervention in either economy, however, differences existed with respect to how they managed their operations. The case is ideally suited to illustrate the on-going tension and different types of best practices in cross-market integration. It provides opportunities to explore the challenges faced by multinational company banks in managing global workforces, the evolution of the banking sector, and the influence of technology in shaping work in organizations.

Teaching Note: 8B07C40 (16 pages)
Industry: Finance and Insurance
Issues: International Management; Expatriate Management; Trade Unions; Management Training; Emerging Markets; Performance Evaluation; Recruiting; Subsidiaries; Career Development; Employee Selection
Difficulty: 4 - Undergraduate/MBA



DAIRY FARM INTERNATIONAL HOLDINGS LIMITED: ANALYSING AN ANNUAL REPORT
Claude P. Lanfranconi, Ken Mark

Product Number: 9B07B009
Publication Date: 8/3/2007
Length: 17 pages

The main objective of this case is to introduce students to the calculation and usage of ratios in a real world environment. Secondly, students will be required to access, read and use an actual annual report. Lastly, Dairy Farm International is an Asian-based multinational and, therefore, by using comparative data from a United Kingdom multinational, Tesco, and a local Canadian company, Sobeys, students will be introduced to issues related to international financial comparisons.

Teaching Note: 8B07B09 (16 pages)
Industry: Retail Trade
Issues: International Financial Accounting; Financial Ratio Analysis; Using an Annual Report
Difficulty: 5 - MBA/Postgraduate



TRANS GLOBAL CORPORATION
Charles McPeak, Owen P. Hall, Stella Hung-Yuan Chu

Product Number: 9B07B006
Publication Date: 7/4/2007
Length: 7 pages

Trans Global Corporation is a multinational company facing a complex set of inter-related problems including: international financial reporting standards, impact of a country's EU status, functional currency decisions, currency translation methods, exchange rates and impact of using derivatives to hedge currency changes.

Teaching Note: 8B07B06 (11 pages)
Issues: Gains and Losses on Currency Transactions; International Financial Reporting Standards; Exchange Rates
Difficulty: 4 - Undergraduate/MBA