Bruns

Case Solution for Merrimack Tractors and Mowers, Inc.: LIFO or FIFO?

Complete Case details are given below :
Case Name :      Merrimack Tractors and Mowers, Inc.: LIFO or FIFO?
Authors :           William J. Bruns Jr., Sharon Bruns, Susan S. Harmeling
Source :             HBS Brief Cases
Case ID :            3217
Discipline :        Accounting
Case Length :    06 pages
Solution sample availability : YES
Plagiarism : NO (100% Original work)
Description for case is given below :
At Merrimack Tractors and Mowers in 2008, product manufacturing costs are increasing faster than competitors’ costs, and as a result earnings are likely to fall below those reported in 2007. The company president and the company controller have discussed this problem, and the controller has mentioned that if the company changed from LIFO to FIFO it might be possible to maintain earnings growth in 2008. He prepares a memo to the president explaining how inventory flow assumptions work and provides pro-forma income statements that show that, for one product (reel mower units), adopting FIFO would allow Merrimack to report higher income in 2008 than it did in 2007, but higher income taxes would have to be paid.

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Case Solution for Danshui Plant No. 2

Complete Case details are given below :
Case Name :      Danshui Plant No. 2
Authors :           William J. Bruns Jr., Julie H. Hertenstein, Kelvin Liu
Source :             HBS Brief Cases
Case ID :            913525
Discipline :        Accounting
Case Length :    05 pages
Solution sample availability : YES
Plagiarism : NO (100% Original work)
Description for case is given below :
Danshui Plant No. 2 in southern China has a one-year contract with Apple Inc. to assemble 2.4 million iPhones. In the first three months of the contract, the plant is unable to assemble as many phones as expected and is operating at a loss. The plant manager must analyze the budget and prepare a summary of monthly operations to help identify the source of performance problems. The plant has had difficulty hiring enough workers despite raising wages over 30%. In addition, the assembly process for an iPhone is complicated, with 140 steps involving over 100 components. The plant manager considers whether a flexible budget would be more useful for uncovering problems than the static budget currently being used. Students must perform break-even and flexible budget analyses and calculate price and usage variances as they consider solutions for the plant’s problems with the iPhone contract. This case, which explores the challenges of outsourcing manufacturing, can be used as an introduction to managerial accounting.

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