Blackheath Manufacturing Company, is a company that manufactures a single product named ¡§Great Heath.¡¨ The company recently hired a new cost accountant, Lee High, who intends to conduct a new cost analysis over a period of three production weeks. Lee wanted to better identify the fixed, variable, and semi-variable costs associated with production of ¡¥Great Heath.¡¦ Once these costs were categorized Lee could determine how this would effect the cost of goods sold. Lee could then develop what the break- even volume that could be generated from a changing volume of sales. The case shows the assumptions that Lee High made with respect to variable as versus fixed costs in determining the cost of goods sold per unit . Lee High was able to develop decision rules for use by the company¡¦s owner for management decision-making purposes. Based upon Lee High¡¦s data, Charlton Blackheath, the owner, dictated a management decision that sales could not be less than a $7.00 per unit order. The case then introduces a series of sales possibilities that are accepted or declined based essentially on these decision rules. However, a young file clerk decided to take an under-bid proposal at $5.50 for an order of 100 units of ¡¥Great Heath¡¦ based upon her own assumption that such a volume order would be profitable. A subsequent sales-cost report was developed by Lee High showing cost per unit based upon his predetermined analysis of costs and including profit per unit. Data showed the file clerk¡¦s order generated a subsequent loss because the price per unit was so low. Based upon this data, Blackheath then fired the clerk for this error and readjusted the per unit price to $8.00 to generate a higher profit.
Lee High had made calculatio ...
|Please login to view the full paper
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.
Please login to view full paper