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Panda Company

...Case Summary Panda has been the low – cost producer of traditional BLUE and BLACK pens. Profit margins were over 20% of sales. Five years earlier, RED pens had been introduced and were sold at 3% premium. Last year, PURPLE pens were sold at 10% premium. RED and PURPLE pens seem more profitable than BLUE and BLACK but overall profitability is down. Jane Mendez was disappointed with the financial results. Jeffrey Donald, the manufacturing manager, said life was simpler when they just produced BLUE and BLACK pens. Difficulties started arising when they started RED pens. They needed to stop production, empty the vats, clean out all remnants of the previous color and start production of red ink. Direct labor cost is 300%, while a few years back it was only 200%. Activity-Based Costing: * Indirect labor * 50% of the indirect labor costs are caused by Production run * 40% of the indirect labor cost were caused by the physical change from one color to another called setup costs * 10% of the time was used to an activity Parts Administration (Book keeping) * Computer Expenses * 20% allocated to support activities (Parts admin.) * 80% of computer resources were used to produce batches and are closely related to handling of production batches ACA No. 3. Eliminate RED and PURPLE pens in the production and go back to the original product line. (use traditional costing only) PROS: * No drastic changes needed since they......

Words: 288 - Pages: 2

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Animals for Rent

...and merciless. The panda issue best describes human’s selfishness. The giant panda is one of the national treasures of China and have been used as China’s diplomatic gifts since ancient times. China’s leadership treats pandas as gifts and sends them abroad in order to bring closer relations with other countries. It is said that “Mao ZeDong tried panda diplomacy whereby pandas were dispatched across the globe as a sign of goodwill. The arrival in the US of Hsing Hsing and Ling Ling, and of Chia Chia and Chin Ching in the United Kingdom sealed a desire for a more cordial relationship with Washington and London” (Snow & Taylor, 2008, p. 285). This is a proof of that pandas are being used as Chinese ambassadors in order to achieve important objective in politics. Moreover, the leadership of China also rent out the pandas to the foreign zoos. It is stated that the foreign zoos can loan the pandas for more than $1 million per annum as this is referred as the form of an experimental exchange(Liu & Wehrfritz, 2006). Seems this kind of rental can be a good way to make profit, but totally not fair to the pandas! Pandas do have feelings too, same as human, they need all the love which they can get. How would they feel if they are treated like prisoners imprisoned in the zoo? Sure they would not be happy and this kind of experience might bring about stress. It is barbaric for the leaders to treat pandas like dolls to send to others because this action treats pandas as profit......

Words: 1960 - Pages: 8