Ivey Publishing
Foxy Originals - Expansion into the U.S. Market
Product Number:
9B07B004
Publication Date:
05/15/2007
Revised Date:
04/28/2014
Length:
9 pages (6 pages of text)
Product Type:
Case (Field)
Source:
Ivey
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.
Learning Objective:
This case is best taught in an introductory managerial accounting course. Students can use cost behavior, contribution and breakeven analysis as financial tools to aid in their decision-making.
Issues:
Disciplines:
Accounting,  Introductory Business
Industries:
Manufacturing
Setting:
United States, Medium, 2005
Intended Audience:
Introductory
Price:
$2.55 CAD / $2.55 USD Printed Copy
$2.25 CAD / $2.25 USD Permissions
$2.25 CAD / $2.25 USD Digital Download
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