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Midwest Office Products
 
 
1.Based on the interviews and data in the case, we calculated the following information.

(1)The cost of processing cartons through the facility:

Personnel expense (warehouse, truck drivers)2,570,000
¡ÐCompensation for truck drivers    (  250,000)
Warehouse personnel expense    $2,020,000
¡ÏWarehouse expenses (excluding personnel)     2,000,000
    $4,020,000

(2)    The cost of entering electronic and manual customer orders:

Order entry expenses    $ 840,000

(3)    The cost of shipping cartons on commercial carriers:

Freight    $ 450,000

(4)    The cost per hour for desktop deliveries:

Compensation for truck drivers     $250,000
¡ÏDelivery truck expenses       200,000
The cost for desktop deliveries     $450,000
¡Ò 6,000 hrs  (1,500hr ¡Ñ 4)    ¡Ò   6,000
         $ 75

2.    The cost and profitability of the five orders, using the cost driver information and its existing costing system:
(1)    The ABC system:

Order    1        2        3        4        5
Sales    $610.00        $ 634.00        $6,100.00        $6,340.00        $6,100.00
Cost of goods sold     500.00        500 ...
 
 
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Franchise Vs. Business Opportunity

To the untrained eye, franchise and business opportunity investments look pretty much the same. Both invite you to purchase a package of goods and services and business concepts. Both offer you the chance to capitalize on a business idea that has already proved to be successful. Both provide some training, handholding and access to a valuable marketplace.
In reality, though, there are huge differences between the two concepts. While these fundamental distinctions sometimes appear subtle, detecting and understanding them can help you protect yourself when you take the plunge into your new business.
If there's one telltale difference between a franchise and a business opportunity, it's the role of a trademark. The licensing of trademark rights is a hallmark of franchising: Every franchisee of a McDonald's, Subway or Holiday Inn is operating under a trademark license. The consistent image portrayed by these and other franchise systems symbolizes their strength in the marketplace, and is the direct result of a trademark license. If a program grants you the right to operate under a trademark owned by the seller, you're most likely looking at a franchise rather than a business opportunity.

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