Reference no: EM131919173
Corporate Decision Making and Incentives Assignment
Please read the attached case Spotted Rhino Corp. and answer the questions.
Case - Spotted Rhino Corp
Questions:
A. Using the data in Exhibit 1, how does the bonus bank balance and bonus payouts evolve for a Jungle manager whose pay-performance sensitivity is 5%, given an improvement goal for residual income of $300,000 each year?
B. Discuss the key challenges arising from the windfall situation in 2018. What could be done to improve the situation?
C. Let's verify Joan's "back-of-the-envelope" calculations. Does internally generating the intangible really create greater shareholder value than acquiring it?
D. How does the decision look like through the lens of a business unit manager compensated based on Jungle's divisional residual income, which in turn is calculated based on GAAP rules? What could be done to improve the situation?
Textbook - Cost Accounting A Managerial Emphasis, Fifteenth Edition by Charles T. Horngren, Srikant M. Datar and Madhav V. Rajan.
Attachment:- Assignment File - Case & Questions.rar
|
Explain difference between accounting and economic profit
: Explain to him the difference between accounting and economic profit, and why it should matter for his decision.
|
|
Should jones consolidate the shipments
: Suppose Jones Company has orders from three customers located in the same market area. One order has a total weight of 4,000 pounds, the second weighs 8,000.
|
|
Give examples of a one-time fixed cost and a variable cost
: Dustin is planning to open a catering business. Give examples of a one-time fixed cost, ongoing fixed cost and variable cost his catering business might incur.
|
|
How much will you save
: The transportation rates are: $18/cwt. for shipments of 1,000-5,000 pounds, $16/cwt. for 5,000-10,000 pounds, and $14/cwt. for shipments over 10,000 pounds.
|
|
How does the bonus bank balance and bonus payouts evolve
: MGMT 222 Corporate Decision Making and Incentives Assignment. How does the bonus bank balance and bonus payouts evolve for a Jungle manager
|
|
Which of the costs do you expect to be fixed in short run
: Suppose that a pharmaceutical company's costs include factory workers'. Which of these costs do you expect to be fixed in the short run, and which variable?
|
|
What elements define value for the customers
: What elements define value for the customers of the Romulus plant? What is the role of logistics and logistics considerations in the success of the Romulus.
|
|
What information would you need to know to calculate profit
: Suppose you were evaluating the profit earned by a pharmaceutical company that produces. What information would you need to know to calculate profit?
|
|
Identify three strategies that you will now incorporate
: Identify three strategies that you will now incorporate into your practice based on this course. Explain your rationale.
|