Question 1) Assume that your R&D team has a new design for their product Able next round that can reduce their material cost of producing units from $8.59 to $7.73. They pass on half of all cost savings by cutting the current price to customers. For simplicity:
• Use current labor cost of $8.37
• Assume all period costs as reported on Andrews Income Statement for Asia Pacific (Annual Report Page 5) will remain the same.
• Current price is equivalent to $30.00
• Shipping cost to Asia Pacific is $2.50 per unit
Determine how many units (000's) of product Able would need to be sold in Asia Pacific alone next round to break even on the product.
Question 2) Select all of the following statements that are true 4 years from now, in the year 2025.
The Asia Pacific Performance segment will demand 2,530,255 units
The American Performance segment will demand 4,192,000 units
The European Performance segment will demand 2,724,244 units
The European Budget segment will demand 5,779,633 units
Question 3) Suppose Baldwin invested in plant and equipment last year. The plant investment was funded with bonds at a face value of $8,000,000 at 12.5% interest and equity of $4,200,000. Depreciation is 15 years straight line. For this transaction alone, which of the following statements are true (select 3 answers)?
On the Balance Sheet, Long Term Debt changed by $8,000,000.
On the Balance Sheet, Plant & Equipment increased by $12,200,000.
Buying the plant had no net effect on the Cash account because the plant was paid for by the bond plus Retained Earnings.
Depreciation increased by $813,333.
Since the new plant was funded with debt and equity, on the Balance Sheet, Retained Earnings decreased by $4,200,000, the difference between the investment and the bond issue.
Cash was pulled from Retained Earnings to cover the $4,200,000 difference between plant purchase and bond issue.
Cash went up when the bond was issued by $8,000,000.
Cash went down by the amount of the plant purchase.
Question 4) Assume Digby expands operations in Asia Pacific in the coming year. In doing so, they have added capacity to fill all demand in-house and have increased automation to reduce labor cost by 10%.
For clarity, assume the following are true:
• Daze material cost is still $12.75.
• Daze labor cost last year was $9.00.
• Daze will be priced at $32.50 per unit, in American dollars.
• Shipping costs from the Americas to Asia Pacific are $2.50 per unit.
What will Daze's contribution margin be in Asia Pacific for the coming year?
Question 5) Demand is created through meeting customer buying criteria, credit terms, awareness (promotion), and accessibility (distribution). According to the Americas Budget segment's customers, which of these products was the most competitive at the end of last year?
Question 6) Local Broad Cost Leader - Low priced products for the local region: our brands offer solid value. Our primary stakeholders are bondholders, customers, stockholders, and management.
Global Broad Differentiator - Premium products for the industry across the globe: our brands withstand the test of time. Our primary stakeholders are customers, stockholders, management, and employees.
Global Niche Cost Leader - Reliable products for low technology customers across the globe: our brands offer value. Our primary stakeholders are bondholders, stockholders, customers, and management.
Global Niche Differentiator - Premium, tailored products for technology-oriented customers across the globe: our brands define the cutting edge. Our primary stakeholders are customers, stockholders, management, and employees.
Which mission statement best represents the Baldwin Company?
Providing value to our customers is why we get up in the morning. We accomplish this by offering products at a low price our domestic customers can afford across a wide variety of market segments.
Consistency and affordability are our goals. Our central mission is to offer dependable, low-price products that our customers around the world can count on.
Lasting innovation is our motivation. We build premium products that are elegantly designed to meet the needs of a variety of market segments around the world.
Innovation meets revolution. We create value of our customers around the world through breakthrough designs that lead to unique high-performance products.
Question 7) You are the IT manager for the Andrews Company. A large shipment of new computers has just arrived. You notice that the inventory is short one computer. The invoice, however, clearly states that all the computers ordered were shipped. You suspect that one of your employees (Bill) has something to do with the missing computer. Which of the following actions would be most effective in dealing with the missing computer?
Rule out other explanations such as an error by the computer distributor.
Ask another employee who is close friend of Bill's to talk with him about the issue and to report back to you.
Send a letter to the computer distributor to document in writing that there was a problem with the shipment.
Call Bill into your office and ask him directly about the missing computer.
Question 8) You were recently hired by the Andrews CEO as a consultant to evaluate the performance of the Chief Financial Officer (CFO). As a part of that process, you interview the CFO's direct reports (employees). Although they indicate that the CFO is technically competent, one individual told you stories about his verbal abuse with employees. Given this information, what would be the most effective next step in the process?
Tell the CEO about what you have uncovered and ask for her permission to speak about it with the CFO.
Focus on the CFO's work performance since his personal behavior is inappropriate in the workplace.
Inform the human resources department that there is a potential problem.
Collect more information about the extent to which this reported behavior is impacting others.