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Spreadsheet Supplement for case 105009.

Introduces responsibility accounting systems.

Discusses the role of differential cost and revenues in solving alternative choice problems.

Spreadsheet Supplement for case 199001

Spreadsheet Supplement for case 105021.

Mondavi Winery is facing a shortage of its Chardonnay wine. This shortage will disrupt its positioning in wine outlets and impact earnings. Allows students to discuss how to communicate such temporary--but financially important--shocks to the capital markets and Mondavi's other stakeholders. Mondavi's subsequent problems in meeting prior earnings forecasts also allow for a discussion of earnings guidance policies.

The collapse of Enron will undoubtedly go down in history as one of the most notorious corporate scandals in the twentieth century. Enron's employees lost billions of dollars in retirement savings tied up in Enron as stock became worthless. The rise and fall of Enron was marked by inflated earnings and substantial amounts of hidden debt, enabled by the use of special purpose entities, the application of unethical accounting techniques, and an unquestioning board of directors. The transformation of Enron from a mundane natural gas transportation company into a financial trading empire, with operations in natural gas, water, broadband, electricity, power plants, and exotic derivatives, was masterminded by Jeffrey Skilling, one-time chief executive officer, and Andrew Fastow, the company's chief financial officer. In the aftermath of the company's collapse, the U.S. Congress enacted sweeping changes to corporate governance. But why did Enron's collapse take the financial community by complete surprise? Were there any warning signs that Enron was not as financially solid as it appeared? The case examines these issues using data from Enron's 2000 10-K and Compustat data for 1984-2000.

This case highlights issues of management accounting and includes a review of product costing, excess capacity, variance analysis, and scrap costs.

Spreadsheet Supplement for case 105005.

Harley-Davidson manufactures and sells motorcycles. It also provides financing for retail purchases and dealer stock. Although Harley's performance has been very strong, analysts and the press have questioned its use of a special-purpose entity to sell securities collateralized by its financing activities. Harley's management must decide how to balance the street's suspicion of this activity with its strategy of providing a "whole motorcycle experience" and the high level of profits created by the current arrangement.

The Wilmont Chemical Corporation produces a variety of industrial products, including a specialty chemical called SC. The company uses an actual costing system and the LIFO inventory method. At the beginning of each year, the company's controller estimates the total direct cost (omitting any manufacturing overhead allocation) per unit of producing SC. Unfortunately, the market demand and selling price are difficult to predict, as are the raw material and direct labor costs. Monthly budgets are prepared in advance, and are subsequently compared with actual results. The controller is wondering if the company's financial statements would be more "managerially relevant" if the company changed to an estimated costing system, where raw material inventory is kept at estimated costs and finished goods inventory is kept at estimated production costs. The case provides information for comparing the actual operating results for a month with the budgeted amounts. Students are asked to prepare three monthly income statements: one using the company's actual costing system; one using an estimated costing system; and, one using a hybrid costing system that incorporates both actual and estimated costs. They are then asked to take a position as to which of the three income statements presents the most managerially relevant information.

Hydrochem, Inc. produces only one product - condutronic plates. The company uses an actual process costing system but is considering changing to a standard costing system. Manufacturing costs consist of raw material, direct labor and manufacturing overhead, and the company uses full absorption costing. Students are provided with account balance information at the beginning of the month and with information regarding the company's events and transactions during the month. Students are asked to prepare two income statements for the month and balance sheets as of the end of the month. One set of financial statements is to be prepared using the company's actual costing system, and the other set of financial statements is to be prepared using the proposed standard costing system. Students are asked to explain the differences between these two sets of financial statements and to take a position as to which set of financial information they prefer.

Gomez Electronics produces three models of portable compact disc (CD) players. The company uses a full-cost standard-costing system for both internal and external financial reporting. However, the company's president is considering changing to a standard direct costing (i.e., variable costing) system for internal purposes. Students are asked to prepare two sets of income statements: one based on a standard full costing system, and the other based on a standard direct costing system. Each set of income statements provides information that reflects budgeted sales and budgeted production, as well as actual sales and actual production. Gomez Electronics has three production departments, all of which have excess capacity. The company has received and an offer from a large discount company to purchase a large quantity of CD players that, except for the plastic case, are similar to one of Gomez Electronics' CD players. The offer stipulates the price, the total quantity, and the delivery schedule. Students are asked to make a decision regarding whether to accept the discount company's offer. In addition, students are asked to make a recommendation regarding the adoption of a standard direct costing system for internal use.

In this, the third of a three-case series, Alex Pearson, Charley's Family Steak House No. 2 manager, continues to prepare for his upcoming meeting with steak house owner Charley Turner. The purpose of the meeting is to discuss the restaurant's 2009 results, review how they compared with budget, and assess how Pearson performed during his second year as restaurant manager. He is hopeful that this year's meeting will go as well as last year's meeting and that Turner will decide to award him a bonus again this year.

Tony Hamilton, brand manager for Distillers Delight in the United Kingdom, is preparing for his upcoming meeting with his boss, Charlotte Handy, managing director for the United Kingdom for Global Distillers, Inc., one of the leading companies in the alcoholic beverages industry. The purpose of the meeting is to review how well his brand performed during the company's 2003 fiscal year. To say the least, it had been a very difficult year. No one had predicted any increase in the country's excise tax, let alone the 60% increase that took effect shortly after the company's 2003 fiscal year began. From that point on, almost nothing had gone according to plan. Thus, Tony is looking for a way to reconcile actual results with planned results in a way that is accurate, informative and understandable. This case is based on an actual situation, and it was written with the cooperation of one of the leading global companies in the spirits industry. The company name, the product name, individuals' names and the numerical data have all been disguised, yet the issues presented are real.

A U.K. real estate firm, required to adopt international accounting standards (IAS) by 2005, must change the reporting of its primary asset (investment property) from the revaluation model under U.K. GAAP to either the cost or fair-value model under IAS. This would have a number of effects on European investment property firms, including Land Securities.

Supplements the (A) case.

Summarizes the process of going public: the steps for SEC approval, the role of the SEC, and the roles of major players such as underwriters and printers.

This guide provides an overview of tax planning, the tax system, and tax laws. It can be used as a supplement to "Taxes and Business Strategy: A Planning Approach," by Myron Scholes, Mark Wolfson, Merle Erickson, Ed Maydew and Terry Shevlin. It focuses on some central concepts for class discussion.

This case involves a hypothetical situation in which two business professors propose a deferred-compensation plan to the president of Stanford University after the passage of the Economic Growth and Reconciliation Act of 2001.