Strategic Management 4e
4th Edition
ISBN: 9781260779646
Author: Frank T. Rothaermel
Publisher: Mc graw hill
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Question
Chapter 10.6, Problem 1CC
Summary Introduction
Case summary:
Company IA has had tremendous success. But, it is facing significant challenges going forward. The powerful competitors of Company IA have taken note of their success. Besides the external issues, the firm is also facing significant internal challenges.
The advent of new leadership is pushing the firm into the online sales of their products. It failed to realize that the internet is a big disruptor for retail business. It is facing major limitations due to its complex ownership structure.
To explain: The internal challenges of Company IA.
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Kim and Park (2011) argue that corporate social responsibility (CSR) activities not only have value for benefitting social causes but can also be regarded as recruiting tools for attracting potential employees who perceive the organization and its CSR activities as an ethical fit. The foundation of this argument comes from an organizational perspective that views employees as important assets for a corporation. Coming from this perspective would mean that corporations would be cognizant about the imperative to have an active CSR program that matches corporate values, missions, and cultures.
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The following cost data relate to the office overhead costs of Hamilton
Accounting Services during the just-completed year:
•
Office rent: $32,400
Office supplies: $6,980
Utilities, office: $18,250
•
Salary, office manager: $62,180
•
Salary, receptionist: $40,560
•
•
Depreciation-office equipment: $13,750
Software licensing fees: $27,320
Other miscellaneous expenses: $35,600
Total overhead costs: $237,040
The company applies overhead costs using a predetermined overhead rate of
$7 per accountant hour. A total of 36,200 accountant hours was recorded for
the year.
Compute the amount of under- or overapplied overhead cost for the year.
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