Old Mule Farms Case Solution

In: Business and Management

Submitted By apruitt01
Words 522
Pages 3
To: | Michael Giberson, BECO 4310-006 | From: | Arielle Pruitt | Date: | January 27, 2014 | Re: | Old Mule Farms Case | | | | |
Jim and Donna Green live on a farm that has been in their family for three generations. However, they have been losing money over the past couple of years because of what it costs to maintain their cows they use for breeding. To help offset their losses, Donna focused on making sure the calf weight at weaning was larger than in past. She also included nutrients in their feed and selected sires whose calves generally grew at a faster rate. These measures helped to increase the farms efficiency but unfortunately it was still not enough. One night after watching The Cattle Show on television, Donna and Jim had several questions on how they should proceed to raise their revenue for the upcoming year. Their first was question is what is the appropriate size for each cow in the herd. The second question the couple has is which method was most appropriate at measuring size: weaning a calf that weighs half of its mother, or comparing the cost of selling the calf to the cost of maintaining the cow. Their third and final concern is to figure out what the drivers of the cow-calf operation are and if the revenue-expense calculation is clear in regards to drivers.
To answer Donna’s first question, I would recommend the average cow size in the herd be 1,100 pounds. The method that most appropriately measures this factor is comparing the cost of selling the calf to the cost of maintaining the cow. As for the last question the couple has, I believe the main driver in this situation is the weight of each cow, and the revenue-expense calculation is proof of this.
Each cow in the herd should weigh 1,100 pounds. It seems that no matter the weight of the cows, the Greens will still be losing profit, but they will lose the least amount if weight…...

Similar Documents

Case Solution

...the romance must inform their supervisors of the relationship. * romance cannot/should not be between employee and client/customer. * those involved in the romance may/should not report to the same supervisor. * romance cannot/should not be between employees of a significant rank difference. * those involved in the romance may/should not work on the same projects. * workplace romances are not/should not be permitted at our/any organization. * romance cannot/should not be between employee and a vendor. * romance cannot/should not be between employee and employee from a competitor. When SHRM surveyed HR personnel and employees about the consequences of such fraternization the results weren’t equal. In all cases HR personnel favored more harsh penalties for office romance. CONSEQUENCES FOR EMPLOYEES IN WORKPLACE ROMANCES Source: 2001 SHRM®/CareerJournal.com Workplace Romance Survey Of the HR professionals surveyed they felt such behavior should allow for: * transfer within organization * termination * counseling * formal reprimand * suspension * demotion At AppleOne Web site it provides recommendations for companies on how to handle office romance. It outlines four steps that can be taken: Step 1 - If you haven't done so, implement, disseminate and unconditionally enforce policies on dating and family relationships in the workplace to promote uniform treatment of all employees. Have a legal professional review these......

Words: 1427 - Pages: 6

Case Solution

...Lyons Document Storage Corporation Case Analysis 1. Before maturity, a bond may be selling at the face value or at a price greater or lesser than the face value.The terms “premium” and “discount” refer to the difference that exists from the face value of the bond. Bonds selling at a price greater than the face value are said to be at a premium and the bonds selling at a price lesser than the face value are said to be at a discount. Premium or discount occurs when nominal interest rate(or coupon rate) of the bond differs from the current market rate of interest demanded by lenders.Regardless of the required yield, the bond price will reach face value as its approaches the maturity date. The bond with a face value of $1000 is issued at a discount price of $907.992 * The amount received by Lyons from its 8% bonds if the rate prevailing at the time of original issue was 9 % is =$ $907.992*10,000 =9,079,920.78 Present Value of $1 |   | At 8% | Discounted value of the bond at the time of issue At 9% | Received Semiannually for 20 years | 19.79277 | 18.40158 | Received at the end of 20 years | 0.208289 | 0.171929 | P.V. of Coupon Earned | 791.711 | 736.0634 | P.V. of Redemption Value | 208.289 | 171.9287 | Total |   | 1000 | 907.9921 | * The recomputed amount in the balance sheet in December,2006 and December,2007 are $9,258,589.55 and $9,292,611.26. * The current value of the bonds outstanding at the current effective rate of 6% is =......

Words: 982 - Pages: 4

Case Solution

...especially given the lack of direct control from the financing party. 2. Is ADI an environment in which corporate entrepreneurs can thrive? 3. What might you have done differently if you were Mr. Payne? Mr. Fishman? Mr. Weigold? Mr. Stata? 4. Was MEMS a success CASE SOLUTION CASE 5-1 PROFIT CENTER PROBLEMS AMAX Automobiles  AMAX Automobiles was a car company with three product lines. Line A was aimed at the luxury segment, line B at the upscale segment, and line C at the mass market segment. Each of the three product lines was sold under a different brand name and used different distribution systems. Lines A, B, and C were currently produced and marketed by divisions A, B, and C, respectively. Some components were common to the three divisions. Some of these common components were sourced externally while others were manufactured inside the company. Also, there existed considerable scope for technology and know-how transfer across divisions. Specifically, product innovations seemed to originate in division A and then migrate to divisions B and C. However, process innovations seemed to originate in divisions C and then migrate to division A and B. How should AMAX be organized and controlled? Solution: According to our opinion, when organization made divisions, automatically the organization made profit centers, because every divisions has its own jobs and each jobs has been delegated. In each divisions, we make standard and rule of law. So we can controlling the......

Words: 1910 - Pages: 8

Old Mule Farms

...Old Mule Farms ACC 502 Managerial Accounting October 15, 2013 Dr. Kyle S. Meyer   Introduction In the ever-growing small to large business sector, operational decisions are important to determine if an organization has sufficient resources to maintain its operation, expand, or make investments for the ongoing benefit company. Organizations often employ professional consultants to evaluate operations deficiencies, including the preparation of cost analysis to better gauge their growth and refine its operating decisions. The ultimate goal is to make a recommendation serving the best interest of the company and the owners, based on a cost analysis, future potential earnings, and market conditions. This evaluation addresses the present operating conditions of Old Mule Farms (hereinafter referred to as “OMF”), a family owned cattle farm. The owners are facing critical decisions regarding the future of the farm and have sought assistance to review all factors that may be affecting the profitability of the farm. The evaluation reveals the financial performance of the company using the information provided in the case, including consideration for all the key drivers of performances, including company profit or loss for both short term and long term. The financial analysis will show how each factor influences managerial decisions using the calculation to support the decision. The findings and recommendation proffered to the owners of the farm, focuses on actions that...

Words: 2255 - Pages: 10

Old Mule Farms Case Study

...------------------------------------------------- Case Study Memorandum TO: Dr. Kathleen Sheehan, BECO 4310 - 003 FROM: Brian J. Walsh DATE: 3/2/2015 RE: Old Mule Farms The Old Mule Farms is a cow-calf operation that provides calves for feedlots to fatten up before being sent to packing houses and eventually sold as meet for consumers. The current owners have been experiencing a problem with losses in revenue. The expenses that Old Mule Farms incurred are veterinary bills, labor, nutritional supplements and minerals, and a variety of forage. The forage is primarily grazed grasses but is supplemented with hay. The owners of the farm have found a correlation between the weight of a cow, and the cost of feeding it, in conjunction with the weight of a calf. The problem that they currently face is three fold. First, what is the proper size of a cow for their herd? Second, what is the best approach to use in measuring a proper size: weaning a calf that is 50% of the mother’s size, or comparing the value of a calf to the cost of maintaining a cow? Last, what are the primary cost drivers in the calf-cow operation, and is the revenue-expense calculation currently in use clear regarding the cost drivers? Based on Old Mill Farms research, a cow above or below 1200 lbs. has a lower weaning calf weight than a cow that is 1200 lbs. The optimum weaning calf weight is when a cow is 1200 lbs.. To answer the first question Old Mule farms has, the proper cow size should be......

Words: 614 - Pages: 3

Case Solution

...Problem Statement: How can Gaylord Bates Company lease a machine without reporting the lease as an asset and liability? Solution: There are two classifications of leases, Capital leases and Operating leases. In order for Gaylord Bates to avoid the equipment being put on their balance sheet as an asset, the lease must meet the criteria of an operating lease. In order for the lease to be considered an operating lease it must meet all of the following four criteria: 1) No transfer of ownership at the end of the lease term, 2) No bargain purchase option, 3) the lease term is less than 75% of the estimated 10 year economic life, and 4) the present value of the lease payments ($59,180) is less than 90% of the fair value of the leased property. In order for the lease to meet the final 2 requirements it must be a 7-year lease with a rate of 6% or higher. At 6% the present value of the payments equals $350,187 (87.5% of fair value). Authoritative Citations: The citations used were: FASB ASC 840-10-25-1, FASB ASC 840-10-20, and FASB ASC 840-20-25-1. FASB ASC 840-10-25-1 was used to understand the criteria needed to meet a capital lease. FASB ASC 840-10-20 was used to define the 4 main criteria of a capital lease along with operating leases. FASB ASC 840-20-25-1 explains how expenses are to be accounted for under an operating lease....

Words: 257 - Pages: 2

Old Exam Solutions - Chapter 7

...Money and Banking Old Exam Solutions - Chapter 7 Fill in the Blanks (NO EXPLANATIONS) Note, some of these are trivial, but most require thought. 1. Holding everything else constant, an increase in the perceived riskiness of a stock would lead to (an increase in / a decrease in / an ambiguous e¤ ect on) its stock price. 2. Recently, there was stronger-than-expected jobs growth. As a result stock markets went up when the news came out. This (would / would not ) be considered an argument against the e¢ cient markets hypothesis. 3. Suppose …nancial market participants expect a corporation to gain $5 per share, but the corporation gains only $4 per share. Holding everything else constant, according to the e¢ cient markets hypothesis, the price of the stock will (increase / decrease / be unchanged ) when the $4 per share gain is announced. 4. Suppose a company decides to retain a higher percentage of earnings so that its dividend payment to stock-holders decreases. “Lower dividends means that stock prices will decrease.” This statement is (true / false). Holding everything else constant, the increase in retained earnings would decrease stock prices. However, a change in retained earnings often leads to a change in perception of growth rate of dividends. If g increases, stock prices would tend to increase. The net result will be an ambiguous e¤ ect on stock prices. SHORT ANSWERS NO CREDIT WILL BE GIVEN FOR JUST STATING THE CORRECT ANSWER. 1. Suppose you observe......

Words: 1643 - Pages: 7

Grennell Farm Case

...Grennell Farm (Case from Accounting Text and Cases twelfth edition) Early in 2006, Denise Grey was notified by a lawyer that her recently deceased uncle had willed her the ownership of a 2,000-acre wheat farm in Iowa. The lawyer asked whether Grey wanted to keep the farm or sell it. Grey was an assistant vice president in the consumer credit department of a large New York bank. Despite the distance between New York and Iowa, grey was interested in retaining ownership of the farm if she could determine its profitability. During the last 10 years of his life, Jeremiah Grennell had hired professional managers to run his farm while he remained in semiretirement in Florida. Keeping the farm as an investment was particularly interesting to Grey for the following reasons. 1) Recent Grain deals with foreign countries had begun to increase present farm commodity prices, and many experts believed these prices would remain high for the next several years. 2) Although the number of small farms had decreased markedly in the last 20 years, Grennell’s use of mechanization and new hybrid seed varieties could be very profitable. 3) After some downward movement in the 1990’s the value of good farmland in Iowa was beginning to appreciate at about 10 percent a year. Included in the lawyer’s letter were data on revenues and expenses for 2005 and certain information on balance sheet items, which are summarized below Beginning Inventory 2005 Wheat production Shipped to grain......

Words: 1084 - Pages: 5

Case for Analysis - Perdue Farms Inc.

...Case for Analysis: Perdue Farms Inc. Responding to the 21st Century Challenges 1. Describe the change in management style at Perdue Farms. By all accounts, Frank Perdue was a workaholic. He was a true entrepreneur. With little education, he started his own company, worked long hours, made many single handed decisions and grew the company. He was a traditional leader and used a centralized management style and kept decision making authority in his own hands. Initially, employees were expected to just do their jobs and it was not until later years that Frank encouraged employee participation in quality and operational decisions. While Jim Perdue also has the entrepreneurial spirit, he is highly educated and has the temperament to move the company into a different type of management style. He believes in the importance of the work force and adopts a people first management style. He, like his father, believed the success of the business relies on providing quality products. But Jim believes the workers, or associates as they are called, play an integral role in that process. He believes the associates are the ones that strive to assure the quality of the product and therefore the satisfaction of the customers. Jim implemented many employee benefit programs in an effort increase associate satisfaction. His idea was to maximize company productivity by using the ideas and information provided by everyone in the organization. The management style at Perdue gradually......

Words: 667 - Pages: 3

Case Analysis of Natureview Farm

...increase. INTERPRETATION FOR OPTION ONE: Increase Third Shift. * Production will be 145,152 units per month if one shift timing is set upto 8 hours including 1 hours for break and lunch time. * Here salary is to be paid at regular interval of time and so it will increase monthly expenditure. * Also training is to be given to employees which will increase an additional burden of expense. * Management is not ready to increase one more shift. FOR OPTION TWO: Increase a new line of production. * Production will be 138,240 units per month. * Here salary of only one panel of worker will increase. * This expenditure is non-recurring in nature. * Less training expenditure will be there. SYNTHESIS The best solution according to me is option second: * As the production units are higher in option one, also the salary and training expenses will also be higher. * Only one time expense is required in installing new line of production. * As comparing to option one, second is more suitable. * If employees will be less it will be easy to manage them. * LEARNING * Understand the concept of labour efficiency and cost variance. * Selecting optimum way of increasing production. * Calculation of production units by different methods. * Study about the variation in standard time and actual time....

Words: 517 - Pages: 3

Old Mule Farms

...For the exclusive use of S. Jiang, 2016. S w 910B04 OLD MULE FARMS David M. Currie and Lorena Mošnja Škare wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2010, Richard Ivey School of Business Foundation Version: (A) 2010-05-03 In March 2009, Donna and Jim Green looked with dismay at the financial statement summarizing the performance of Old Mule Farms for the year 2008. Old Mule’s cow-calf operation had experienced another year of losses. Especially frustrating was that the losses occurred despite the Greens’ multiple efforts to improve the farm’s efficiency. While these efforts improved performance compared to 2007, they were not sufficient to overcome the decline in calf prices, so the operation continued...

Words: 2454 - Pages: 10

Case Solutions

...CHAPTER 1 ACCOUNTING: INFORMATION FOR DECISION MAKING OVERVIEW OF BRIEF EXERCISES, EXERCISES AND CRITICAL THINKING CASES Brief Exercises B. Ex. 1.1 B. Ex. 1.2 B. Ex. 1.3 B. Ex. 1.4 B. Ex. 1.5 B. Ex. 1.6 B. Ex. 1.7 B. Ex. 1.8 B. Ex. 1.9 B. Ex. 1.10 Learning Objectives 1, 3, 5 2,5 3,4 5,6 1, 3, 5, 6 5, 6 2, 5, 6 7, 8 5, 7 1 Topic Users of accounting information Components of internal control Inexact or approximate measures Standards for the preparation of accounting information FASB conceptual framework PCAOB COSO Professional certifications in accounting AICPA code of professional conduct Personal benefits of accounting skills Skills Analysis Analysis Analysis, judgment Analysis Analysis Analysis, research Analysis, ethics Analysis Analysis, ethics Analysis Exercises 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16 Topic You as a user of accounting information Real World: Boeing Company, California Public Employees Retirement System, China Airlines Users of accounting information What is financial reporting? Generally accepted accounting principles Accounting organizations Investment return Accounting terminology Accounting organizations Financial and management accounting Management accounting information Accounting organizations Purpose of an audit Audits of financial statements Ethics and professional judgment Careers in accounting Home Depot, Inc. general information Learning Objectives Skills 1 Analysis, judgment 3, 4 Analysis,......

Words: 7422 - Pages: 30

Old Mule Farms

...For the exclusive use of M. Neger, 2016. S w 910B04 OLD MULE FARMS David M. Currie and Lorena Mošnja Škare wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2010, Richard Ivey School of Business Foundation Version: (A) 2010-05-03 In March 2009, Donna and Jim Green looked with dismay at the financial statement summarizing the performance of Old Mule Farms for the year 2008. Old Mule’s cow-calf operation had experienced another year of losses. Especially frustrating was that the losses occurred despite the Greens’ multiple efforts to improve the farm’s efficiency. While these efforts improved performance compared to 2007, they were not sufficient to overcome the decline in calf prices, so the operation continued...

Words: 2454 - Pages: 10

Maple Farms Case Brief

...Maple Farms, Inc. v. City School District of the City of Elmira, New York Supreme Court of New York, Special Term, Chemung County, 76 Misc. 2d 1080; 352 N.Y.S.2d 784 (1974) FACTS Maple Farms, Inc. signed a contract with City School District of the City of Elmira, New York to supply milk at a specified price. The United States Department of Agriculture controls the price of raw milk at the farm. The contract gave responsibility of an increased milk price the responsibility of the milk dealer. The supplier, Maple Farms was aware that the price of raw milk fluctuated but did not include a clause to excuse it. The supplier has entered into similar contracts with the plaintiff for the last ten years. ISSUE Maple Farms sought to terminate the contract to supply milk at a set price to the school. The grounds for termination were based on legal impossibility and the school district could cancel the contract without violating N.Y. Const. art. VIII. § 1. DECISION Plaintiff’s motion was denied and defendant was granted summary judgment which dismissed the complaint. REASON Plaintiff argued impossibility and impracticability due to extreme and unreasonable difficulty, expense, injury or loss involved. Impracticability exists when it can only be done at an excessive and unreasonable cost. [HN3] states “where economic hardship alone is involved performance will not be excused.” [HN5] U.C.C. § 2-615 states “that increased cost alone does not excuse......

Words: 329 - Pages: 2

Natureview Farm Case (Solved)

...Instituto Tecnológico y de Estudios Superiores de Monterrey Campus Ciudad de México. Estrategia de Operaciones Benjamín Casar 971389 Angélica Hernández 1490033 Natureview Farm Tabla de Contenido Introducción ………………………………………………………………………………………………………………..2 Modelo de Negocio: 2 Identifica las razones por las que la red de abasto de Tamiflu fue incierta despues de haber cumplido con las backorders. 3 Valore los elementos a considerar en el manejo de reservas para una pandemia global. 3 Determine los retos para construir una cadena de suministro coordinada para el manejo de la estrategia antiviral global. 3 Actualización del Caso 4 Bibliografía…………………………………………………………………………………………………………………4 Introducción: El problema principal de Naturview es que tienen que realizar decisiones estratégicas de mercadotecnia para tener un crecimiento de $13,000,000.00 a $20,000,000.00 antes de llegar al final del 2001 Análisis FODA: Reconozca los factores de éxito de Natureview en términos de producto y canal comercial. En términos de producto: * El tiempo de vida en anaquel que es de 50 días contra los 30 días de los productos competidores. * Un producto totalmente natural y orgánico por completo, desde la leche utilizada de vacas que no han sido tratadas con rGBH, que es una hormona para incrementar la producción de leche, hasta los ingredientes adicionales con el que es preparado. * La fuerte reputación que tiene el producto por ser de gran......

Words: 918 - Pages: 4