2510 case
docx
keyboard_arrow_up
School
University of Windsor *
*We aren’t endorsed by this school
Course
2510
Subject
Accounting
Date
Apr 3, 2024
Type
docx
Pages
5
Uploaded by MateOtterPerson4020
ACCT 2510 case study
Sabah Taher, Dalia al-qadi Dr. Jerry Sun
March 14th, 2023
Initially the overall view of the agreement amongst Super Software Co (SSC) and ABC limited seems to be a thorough and successful execution partnership that both parties are involved in. although there are several inconsistencies. For example, ABC is being paid 300,000 to offer lunch packages to staff every day for a year which is missing some relevant information that could be useful towards the company. The first obstacle is that the precise number of SSC employees is unknown. Without this amount, ABC would find itself having to provide for an excessive number of workers on a daily basis, which could put a strain on its finances and inventory. This can lead to a shortage in serving sandwiches to SSC employees because they do not
have enough resources for this. This will not only affect ABC limited but also the supermarkets and grocery stores that it produces for. Another important issue that is occurring in this situation is that the uncertainty agreement based on dependency regarding the amount of lunch packages that is picked up begins to further complicate the situation. This is because in the agreement it was stated that “not dependent on the number of lunch packages picked up” which means that occasionally some employees may come to pick up their lunch packages and others may not. Employee attendance fluctuations may result in ABC experiencing unpredictable financial constraints because there are no explicit guidelines in place to control changes in packages. If ABC Limited decides to take on similar projects in the future, it would be wise to obtain an estimate of the number of employees at the company for which meal packages are being provided. ABC would be less likely to feel overburdened if they had access to this SSC information since they could plan ahead and make the appropriate number of meals. The second
suggestion is to set a maximum number of meals that can be bought. The limit would depend on how many workers the companies they support have. Setting such a restriction would enable ABC to determine the precise amount of profit they would be making from deals such as these.
Additionally, ABC Limited can maintain efficiency by implementing this measure, ensuring resources are used wisely and avoiding overcommitment to meal provision. This aligns with the company's goal of boosting profitability while providing high quality services to employees. In conclusion, obtaining employee estimates and setting maximum meal purchase limits based on workforce size are important steps for ABC Limited to enhance profitability analysis, operational
planning, and overall project management moving forward.
Secondly, ABC limited is facing another issue regarding the $30,000 purchase of frozen
chicken meat from a fresh meat butcher (FMB). financial difficulties in regards to a meat supplier is being investigated for contamination of the chicken produce. Upon the investigation ABC limited has been suspended and is no longer able to provide any chicken or meat to consumers. Using the perpetual inventory method this may benefit ABC limited greatly because it will allow them to avoid future purchases of perishable. They could have avoided losing $30,000 if they were able to delay the purchase from FMB and were educated on the matter beforehand. Due to the purchase of the chicken, if they would have held off it would have been possible that they would be made aware of the investigation and not make any purchases.
The next issue is in regards to the agreement of ABC limited which allows them to
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
provide lunch packages. This means that the number of sold packages is dependent on the amount of packages bought by customers. In doing so, this is an issue for ABC because they are losing profit because when they do not sell the items before the expiration date then they are no longer legally able to sell that item or it will result in a lawsuit. The packages are being sold for $3.50, and they are being delivered for $30,000 of the packages. If there were no packages left to
sell it would result in ABC earning a profit of $105,000. ABC Limited's profits can be protected, it is advisable for them to reconsider the statement stating that “the amount of packages ABC sells to stores depends on the number of packages sold to consumers before the expiration date.” ABC would benefit more from providing businesses a set number of packages according to their needs, with the stores having to
sell the lunch packages before they expire. This strategy would guarantee more profitability and shield ABC Limited from losses on unsold lunch packages. Retailers would also continue to gain
from the lunch package discounts.
Regarding loyalty programs, there is a problem with the existing program being unduly strict, even when efforts like ABC Limited's can drive higher customer spending. Regular customers would benefit from it, but new or occasional customers might not be drawn in because
they would have to spend a lot more on numerous meals in order to accrue enough points for a free lunch package.
Customers who purchase standard lunch boxes will get one point, and they will need to accumulate 20 points to be eligible for a free regular lunch package. It would take a client 20
lunch packages, each costing $8.00, to earn enough points for a reward. Therefore, it would need
$160 to get 20 points. An individual who regularly purchased these lunch packages—even before
the loyalty program—would greatly benefit from this program; on the other hand, an individual who did not often purchase these lunch packages would not be prepared to pay more than $160 to redeem one standard lunch box for free.
To make the program more appealing to existing and new customers, it is advised that ABC Limited reduce the amount of points required to redeem a standard lunch box to a more reasonable 10 points. This adjustment strikes a balance between consumer appeal and financial feasibility.
Additionally, there could be an issue with ABC's strategy for recording redeemed lunch packages. ABC limited has a perpetual inventory system meaning, every change must be recorded continuously. Subtracting the lunch box cost from retailers that have already bought them might result in confusion and accounting mistakes.
It is advised that ABC separate the meals that are redeemed from those that are sold to retailers in order to resolve this problem. Better monitoring of redeemed meals would be possible
as a result, eliminating the need for ongoing retail purchase deductions, guaranteeing more precise and effective record-keeping in ABC Limited's perpetual inventory system.
Related Documents
Related Questions
OPPO A9 2020
2021/01/04 08:53
I give you too much pressure to pay
your,
IUal ecause the new branch may not have generated enough cash flow within the year
to cover the PHP8 million.
WHAT'S NEW
B. Activity #1. Decide the following scenarios whether long-term or short-term financing is
needed.
(long-term loan, short-term
loan)
Need/Activity
1. Acquisition of equipment
2. Franchise of a fast-food outlet
3. Purchase of inventory for a clothing shop
4. Loan for agricultural needs (i.e. palay production, mango, etc.)
5. Loan for purchase of a commercial space
6. Development of a subdivision
7. Auto-loan
8. Loan for sari-sari store supplies
9. Housing Loan
10. Emergency loans (advances)
WHAT IS IT
arrow_forward
Assignment [25 Marks]
Important Warning: Do not use artificial intelligence to answer assignment questions. If our
system detects AI-generated responses, you will not receive any marks. Make sure to complete
the assignment answers on your own.
Good luck, students!
A corporation holds assets worth five times the value of its owner's equity, with a real estate
investment valued at $750,000. The firm's sales are seven times its owner's equity, and the
profit margin is 6%. What is the firm's ROA? Consider the average returns of the following
investments:
Average Return
Investment
Small Stocks 23.1%
S&P 500
13.7%
Corporate Bonds
7.2%
Treasury Bonds
6.5%
Treasury Bills 4.4%
What is the excess return for Treasury Bonds after spending $20 on management fees? %?
Case Study Question
GreenFoods, a mid-sized organic food company, has seen steady growth over the last decade due
to increasing consumer interest in organic and sustainable products. The company has built a
loyal customer base in urban…
arrow_forward
Question 1
Partners Telecom (“PT”) is a company based in Windhoek that sells mobile broadband (also called “data” in layman language) to individual customers. The company is considering selling the broadband business to its management in an arrangement called a management buyout (MBO). The following information has been made available for the proposal:
- At the beginning of 2022, the date on which the business will be sold to management, the license to sell broadband will be having two years remaining. To acquire a license after it expires, there should be a tender and the outcome is unknown.
- The company will apply a differential rate system that charges different rates during peak and off peak hours. Peak are hours are the hours between 9am and 5pm and will be charged $0.05 per minute in 2022. Off peak hours will be charged $0.02 per minutes in the same period. It is expected that in 2023 the charge will reduce by 10%.
- The operating year will have 360 days. On average, consumption…
arrow_forward
Assignment
arrow_forward
Domestic
Don't upload image please
arrow_forward
H2
arrow_forward
25 Marks
arrow_forward
Don't use Ai
arrow_forward
Question
arrow_forward
Pls answer number 15 with solutions
An entity is the defendant in a patent infringement lawsuit. The entity’s lawyers believe there is a 30% chance that the court will dismiss the case and the entity will incur no outflow of economic benefits. However, if the court rules in favor of the claimant, the lawyers believe that there is a 20% chance that the entity will be required to pay damages of ₱800,000 (the amount sought by the claimant) and an 80% chance that the entity will be required to pay damages of ₱400,000 (the amount that was recently awarded by the same judge in a similar case). Other outcomes are unlikely.
The court is expected to rule in late December 20x2. There is no indication that the claimant will settle out of court. A 7% risk adjustment factor to the probability-weighted expected cash flows is considered appropriate to reflect the uncertainties in the cash flow estimates. An appropriate discount rate is 10% per year.
How much is the provision for lawsuit at…
arrow_forward
HW #10 (continued)
JK7 [7 pts] For the satellite contract described in the in-class
exercise, the build plan and spending profile is shown below.
- The contract calls for the following payment profile from the customer
• Payments = 80% of company expenditures in each year, with an additional
milestone payment of $100M in the year that each satellite is completed
• Create a spreadsheet to model the full 10-year program and use it to (a)
annual cash flow (b) IRR for the full 7-satellite, 10-year program
1
2
3
4
5
6
7
8
9
10
S1
10%
30%
40%
20%
S2
30%
50%
20%
S3
30%
50%
20%
S4
30%
50%
20%
S5
30%
50%
20%
S6
30%
50%
20%
S7
30%
50%
20%
arrow_forward
QUESTION 30
WKU is doing the following two research projects:
X: Developing identity theft prevention software. The software will be sold in the market.
Y: Cost reimbursement contract with the US Treasury Department. WKU performs a financial fraud
detection research and it will be reimbursed 250% of the reported costs incurred in the project.
For each project, WKU incurred both direct and indirect costs. WKU incurred a total of $1,000,000 indirect costs. Indirect costs are allocated using a base chosen by WKU. The following information is given:
Project
Direct costs
Computer time in hours
(CTH)
Pages of all articles read
(PAR)
Lab experimental hours (LEH)
Number of assistants used (NAU)
X
$1,000,000
5,000
65,000
1,000
300
Y
$2,500,000
5,000
35,000
4,000
500
Which of the following allocation bases is the best for the benefit of WKU?
A.
CTH
B.
LEH
C.
PAR…
arrow_forward
ces
W
[The following information applies to the questions displayed below.]
Nick's Novelties, Incorporated, is considering the purchase of new electronic games to place in its
amusement houses. The games would cost a total of $310,000, have a fifteen-year useful life, and have a
total salvage value of $31,000. The company estimates that annual revenues and expenses associated
with the games would be as follows:
Revenues
Less operating expenses:
Commissions to amusement houses
Insurance
Depreciation
Maintenance
Net operating income
Exercise 12-8 Part 1 (Algo)
Complete this question by entering your answers in the tabs below.
Req 1A
$ 90,000
58,000
18,600
70,000
Required:
1a. Compute the payback period associated with the new electronic games.
1b. Assume that Nick's Novelties, Incorporated, will not purchase new games unless they provide a payback period of five
years or less. Would the company purchase the new games?
Req 1B.
arrow_forward
Please Write Step by Step Solution
Otherwise i give DISLIKE !!
arrow_forward
B1
arrow_forward
CH11 Q2
arrow_forward
Problem 2
Homely Development Corporation is considering bidding on a contract for a new office
complex. The company needs to decide if it should bid on the contract. The codt of preparing the
bid is $200,000. The company estimates that it has an 80% chance of winning the contract and
20% of losing the bid. If the company wins the bid it will have to pay $2,000,000 to become a
partner in the contract. Once they are partners in the contract, they could conduct a market
research study at $150,000. The research project could return with a forecast of a high market
demand or low market demand. Regardless of the survey result must decide if they want to build
the office complex or sell the rights to another company. Homely estimates that selling the
contract rights will generate revenues of $3,500,000. If Homely decides to build the office
complex they will generate $5,000,000 in revenue if demand is high and $3,000,000 if demand is
low. Information for this project is listed below.
OMI
Cost…
arrow_forward
Need answer without using AI
arrow_forward
Solve 3
arrow_forward
Don't use ai
arrow_forward
AI answer will be rejected
arrow_forward
Sh9
Please help me
Solution
arrow_forward
SEE MORE QUESTIONS
Recommended textbooks for you

College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Related Questions
- OPPO A9 2020 2021/01/04 08:53 I give you too much pressure to pay your, IUal ecause the new branch may not have generated enough cash flow within the year to cover the PHP8 million. WHAT'S NEW B. Activity #1. Decide the following scenarios whether long-term or short-term financing is needed. (long-term loan, short-term loan) Need/Activity 1. Acquisition of equipment 2. Franchise of a fast-food outlet 3. Purchase of inventory for a clothing shop 4. Loan for agricultural needs (i.e. palay production, mango, etc.) 5. Loan for purchase of a commercial space 6. Development of a subdivision 7. Auto-loan 8. Loan for sari-sari store supplies 9. Housing Loan 10. Emergency loans (advances) WHAT IS ITarrow_forwardAssignment [25 Marks] Important Warning: Do not use artificial intelligence to answer assignment questions. If our system detects AI-generated responses, you will not receive any marks. Make sure to complete the assignment answers on your own. Good luck, students! A corporation holds assets worth five times the value of its owner's equity, with a real estate investment valued at $750,000. The firm's sales are seven times its owner's equity, and the profit margin is 6%. What is the firm's ROA? Consider the average returns of the following investments: Average Return Investment Small Stocks 23.1% S&P 500 13.7% Corporate Bonds 7.2% Treasury Bonds 6.5% Treasury Bills 4.4% What is the excess return for Treasury Bonds after spending $20 on management fees? %? Case Study Question GreenFoods, a mid-sized organic food company, has seen steady growth over the last decade due to increasing consumer interest in organic and sustainable products. The company has built a loyal customer base in urban…arrow_forwardQuestion 1 Partners Telecom (“PT”) is a company based in Windhoek that sells mobile broadband (also called “data” in layman language) to individual customers. The company is considering selling the broadband business to its management in an arrangement called a management buyout (MBO). The following information has been made available for the proposal: - At the beginning of 2022, the date on which the business will be sold to management, the license to sell broadband will be having two years remaining. To acquire a license after it expires, there should be a tender and the outcome is unknown. - The company will apply a differential rate system that charges different rates during peak and off peak hours. Peak are hours are the hours between 9am and 5pm and will be charged $0.05 per minute in 2022. Off peak hours will be charged $0.02 per minutes in the same period. It is expected that in 2023 the charge will reduce by 10%. - The operating year will have 360 days. On average, consumption…arrow_forward
- Pls answer number 15 with solutions An entity is the defendant in a patent infringement lawsuit. The entity’s lawyers believe there is a 30% chance that the court will dismiss the case and the entity will incur no outflow of economic benefits. However, if the court rules in favor of the claimant, the lawyers believe that there is a 20% chance that the entity will be required to pay damages of ₱800,000 (the amount sought by the claimant) and an 80% chance that the entity will be required to pay damages of ₱400,000 (the amount that was recently awarded by the same judge in a similar case). Other outcomes are unlikely. The court is expected to rule in late December 20x2. There is no indication that the claimant will settle out of court. A 7% risk adjustment factor to the probability-weighted expected cash flows is considered appropriate to reflect the uncertainties in the cash flow estimates. An appropriate discount rate is 10% per year. How much is the provision for lawsuit at…arrow_forwardHW #10 (continued) JK7 [7 pts] For the satellite contract described in the in-class exercise, the build plan and spending profile is shown below. - The contract calls for the following payment profile from the customer • Payments = 80% of company expenditures in each year, with an additional milestone payment of $100M in the year that each satellite is completed • Create a spreadsheet to model the full 10-year program and use it to (a) annual cash flow (b) IRR for the full 7-satellite, 10-year program 1 2 3 4 5 6 7 8 9 10 S1 10% 30% 40% 20% S2 30% 50% 20% S3 30% 50% 20% S4 30% 50% 20% S5 30% 50% 20% S6 30% 50% 20% S7 30% 50% 20%arrow_forwardQUESTION 30 WKU is doing the following two research projects: X: Developing identity theft prevention software. The software will be sold in the market. Y: Cost reimbursement contract with the US Treasury Department. WKU performs a financial fraud detection research and it will be reimbursed 250% of the reported costs incurred in the project. For each project, WKU incurred both direct and indirect costs. WKU incurred a total of $1,000,000 indirect costs. Indirect costs are allocated using a base chosen by WKU. The following information is given: Project Direct costs Computer time in hours (CTH) Pages of all articles read (PAR) Lab experimental hours (LEH) Number of assistants used (NAU) X $1,000,000 5,000 65,000 1,000 300 Y $2,500,000 5,000 35,000 4,000 500 Which of the following allocation bases is the best for the benefit of WKU? A. CTH B. LEH C. PAR…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,

College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,