International Business: The Challenges of Globalization (9th Edition) (What's New in Management)
International Business: The Challenges of Globalization (9th Edition) (What's New in Management)
9th Edition
ISBN: 9780134729220
Author: John J. Wild, Kenneth L. Wild
Publisher: PEARSON
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Chapter 13, Problem 7EC
Summary Introduction

To discuss:

Whether there is a company that succeeded under the circumstances that are similar to those that are faced by my firm.

Given information:

I am the chief operating officer of a UD-based telecommunication firm considering a joint ventures inside China with a Chinese firm. The consultant I hired to help through the negotiations has just informed that ethical concerns can arise when international companies consider a cooperative form of market entry (such as joint ventures) with a local partner in any market. This is especially true when each partner contributes personnel to the ventures because cultural perspectives cause people to see ethical dilemmas differently.

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Gorman Nurseries Inc. grows poinsettias and fruit trees in a green house/nursery operation. The following information was provided for the coming year. Sales $9,70,000 $31,00,000 Variable cost of goods sold 4,60,000 16,30,000 1,60,000 2,00,000 Direct fixed overhead A sales commission of 4% of sales is paid for each of the two product lines. Direct fixed selling and administrative expense was estimated to be $146,000 for the poinsettia line and $87,000 for the fruit tree line. Common fixed overhead for the nursery operation was estimated to be $800,000; common selling and administrative expense was estimated to be $450,000. Prepare a segmented income statement for Gorman Nurseries for the coming year, using variable costing.
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