SOLUTION: Craig Corporation or the Lori Corporation Accounting Problem

You are thinking of investing in one of two corporations, both in the same industry, the Craig Corporation or the Lori Corporation. Selected data follows:

Sales and expense data for the year ended 12/31/17:

Craig: Gross revenue $47,350,000; Returns $2,510,000

Lori: Gross revenue $56,295,000; Returns $3,780,000

Selling expenses:

Craig: Payroll $4,442,000; benefits $2,150,000, travel $650,200; supplies $450,150, commissions $720,400, marketing $1,010,000, postage $310,300, misc $61,500.

Lori: Payroll $4,991,000; benefits $2,350,000, travel $521,200; supplies $590,650, commissions $622,300, marketing $845,000, postage $305,100, misc $221,300.

Administrative expenses:

Craig: Distribution $2,331,000, warehouse $1,175,000, IT $642,200, finance $583,400, human resources $492,250; administrative $383,000, depreciation $187,000

Lori: Distribution $2,922,310, warehouse $1,630,000, IT $692,410, finance $615,270, human resources $362,760; administrative $580,400, depreciation $197,100.

Other Gains and Losses

Craig: Sale of machine with a book value of $37,500 for $8,000 cash. Loss due to fire damage of $312,000.

Lori: Sold a marketable security at a loss of $193,200. Sold a building machine with a book value of $235,000 for $102,200.

Irregular Items:

Craig: Profit of discontinued division (not yet sold) of $212,000

Lori: Loss on sale of discontinued division of $875,000 before tax effect.

In addition Craig discovered an inventory error from 2015 which had the effect of overstating income for 2016 by $65,000 before tax.

Tax rates: 35% for both companies:

Outstanding shares of common stock:

Craig: 2,000,000 $1PV shares authorized,  1,100,000 shares issued and outstanding.

Lori:   3,100,000 $1PV shares authorized,  1,250,000 shares issued and outstanding.

Dividends: both companies paid cash dividends of $1.25 per share.

Selected Balance Sheet Information:

Craig: Cash $1,622,000; marketable securities (at cost $410,300, at fair value $695,400); Account receivable (gross $1,875,400 less allowance for doubtful accounts of $112,100); Finished goods inventory, opening balance $399,400, purchases $12,843,400, ending balance $785,610. Prepaid expenses $40,210. Plant assets at cost $22,700,000, accumulated depreciation $8,612,000. Accounts payable, $493,410, accrued expense payable $311,260, bonds payable $4,814,693, capital stock $1,450,000, beginning retained earnings $2,510,215.

Lori: Cash $1,910,000; marketable securities (at cost $652,430, at fair value $699,400); Account receivable (gross $3,135,400 less allowance for doubtful accounts of $122,300); Finished goods inventory, opening balance $322,640, purchases $14,892,400, ending balance $285,420. Prepaid expenses $61,310. Plant assets at cost $19,953,527, accumulated depreciation $8,395,000. Accounts payable, $733,450, accrued expense payable $342,480, bonds payable $1,644,400, Capital stock $2,210,000, beginning retained earnings $1,850,500.


  1. Prepare a separate schedule comparing the selling and administrative expenses of the two companies. Separate subtotals are required for both selling and administrative expenses. You should have a column which compares the dollar difference by line item of the two companies.
  2. Prepare a separate schedule of cost of goods sold for each of the companies.
  3. Prepare a comparative income statement in good form for the two companies. Be sure the selling, administrative and cost of goods number comes from your first two schedules by way of formula. Do not simply type in numbers. Percentage of sale data should be presented for cost of goods sold, gross margin, selling expense and administrative expense and net income.
  4. Prepare an EPS summary (incl disc operations) following your income statement.
  5. Prepare a classified balance sheet as shown in chapter 5 of the text. Capital stock must be broken down between common stock and additional paid in capital.
  6. Prepare a statement of Retained Earnings. Make sure the net income number is transferred from the income statement by formula and also that total Retained earnings is transferred to the balance sheet by formula.
  7. Properly formatted numbers, the appropriate use of $ signs, underlines and double underlines are imperative. Style counts big!

SOLUTION: Coke vs. Pepsi, 2001

Coke vs. Pepsi, 2001 Case Study Solution

Assume the manager’s role

Understand the environment in which the company operates

  1. The worldwide socioeconomic and political environment
  2. The domestic environment
  3. The industry situation
  4. Know the company’s history, current condition, and future

Solve the problem facing the company

  1. Identify the problem
  2. Define the alternatives
  3. Gather information about alternatives
  4. Analyze the risk & return of the options
  5. Make the decision and develop a plan of action

CASE SOLUTION: Alibaba Group: Technology, Strategy, and Sustainability


This case examines Alibaba’s sustainable development (SD) and corporate social responsibility (CSR), aligning internal business practises with external financial, environmental and social responsibilities. Drawing upon existing literatures on SD and CSR, and referencing in-country empirical case-study research. Alibaba’s SD and CSR are growing in importance with the main drivers of the change being,

CASE 10 SOLUTION: Trouble at City Zoo

Part 1: Analysis and Problem Statement

  • Brief: provide an overview of situation as an introduction.
  • Symptoms of a problem
  • Cause of a problem
  • Problem – a statement of the problem, in terms of organization behaviour, compelling management action

Part 2: Analysis of 3 Alternatives and final recommendation

  • Present a discussion of three alternatives
  • Each alternative needs analysis
  • Discussion of pros and cons OR advantages and disadvantages OR strengths and weakness of each
  • For this case study, focus on organization behavior especially effectiveness issues
  • Decision or Recommendation: Recommend that best alternative and provide a brief rationale.

Part 1: Analysis and Problem Statement

Case Overview

City Zoo is a renowned tourist attraction center where children of all ages learn about animals and see them in their natural environment. It employs more than 157 full time workers and, more than 550 part-time employees. It has long has a reputation for providing quality environment for its animals due is dedicated staff and timely funding from the public.  However, the city is faced with various number of challenges that has compromised the wellbeing of animals and leadership effectiveness. For instance, the ministry of natural resources determined that lack of effective communication led to the death of some animals. There is lack of effective communication as some employees choose not to pass important information to their heads.


Codreanu, A. (2010). Organizational change: a matter of individual and group behavior transformation. Journal of Defense Resources Management, 1(1), 49-56. Retrieved from

Griffin, R. & Moorhead, G. (2014). Organizational behavior. Mason, OH: South-Western/Cengage Learning.

Kotter, J. (2013). Leading change. USA: Harvard Business Press.

Miner, J. (2015). Organizational Behavior 4: From Theory to Practice. UK: Routledge.

Phillips, J. & Gully, S. (2013). Organizational behavior. Mason, OH: South-Western Cengage Learning.

Pieterse, J., Caniëls, M., & Homan, T. (2012). Professional discourses and resistance to change. Journal of Org Change Mgmt, 25(6), 798-818.

Rosenblum, S. & Louis, K. (2013). Stability and Change. Boston, MA: Springer US.

CASE SOLUTION: IKEA Slowly Expands Its U.S. Market Presence

Questions for Discussion

  1. Given the SWOT analysis presented in the case, what are IKEA’s key competitive
    advantages? What strategic focus should the company take as it looks to further expand into the U.S. market?
  2. What factor is the biggest reason for IKEA’s growth and popularity: value or image? Which is more important in the U.S. market? Why?
  3. What strategic alternatives would you suggest IKEA employ to further penetrate the U.S. market?
  4. Speculate on what will happen at IKEA stores as they are adapted to fit local tastes. Is the company’s trade-off of service for low cost sustainable in the long term?


IKEA’s key competitive advantages are that it offers high-quality products, and its prices are competitive. Unlike the well-established companies in the United States, IKEA is not among the largest, but its products are still known to be among the best available in the market

CASE SOLUTION: Gillette: Why Innovation May Not Be Enough

Questions for Discussion

  1. Evaluate product innovation at Gillette throughout its history. Has Gillette been a
    victim of its own success? Has product innovation in the wet-shaving market come to an end? Explain.
  2. What do you make of the razor wars, first between Gillette and Schick, and now with online competitors? Does Gillette face a serious threat from competitive inroads? Explain.
  3. What actions would you recommend over the next five years that could help Gillette maintain its worldwide dominance in the shaving market? What specific marketing program decisions would you recommend? Should Gillette be worried about its pricing strategy? Explain.


Gillette has not been a victim of its success simply because the wet-shaving market has few competitors. The success that Gillette has managed through the years is attributed to the fact that competitors in the market have not been coming up with appropriate strategies to compete.

Case study analysis in healthcare marketing: Covert Operations

  1. Overview of the case
  2. Key issues in the case
  3. Solutions to the key issues identified in the case
  4. The best solution

Overview of the case

The “Covert Operations” case gives us an insight on how organizations can go a long way in exercising marketing communications mix despite associated ethical concerns. It reveals how choosing a communication marketing mix can be a hurdle in a more competitive market. Established practices need to adopt a marketing mix that sets them apart from their competitors. The appetite for increased customer volume has driven Renew Clinic into considering marketing strategies that may have ethical implications. Dr Gene Cole, a co- owner of a three physicians’ medical practice which specializes in cosmetic surgery plans to introduce a new marketing communication mix. Renew Clinic is located in Brookhaven in the South Atlantic region of the United States. Brookhaven has a population of 437,319. The heated competition and an increased demand of cosmetic surgery services has forced clinics in Brookhaven to apply new ways of marketing communications in an attempt to attract more customers.


Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2010). Business ethics: Ethical decision making and cases : 2009 update. Mason, OH: South-Western Cengage Learning.

Kubicki, M., Milano, C., & Probert, C. (2015). Marketing mix.

Martin, D., & Schouten, J. (2012). Sustainable marketing. Upper Saddle River, NJ: Pearson Prentice Hall.


CASE SOLUTION: Zappos: Delivering Happiness to Stakeholders

  1. Overview of the Case
  2. Key Issues and Challenges
  3. Possible Solutions and the Recommended Solution

Overview of the Case

Zappos, an online shoe company with its headquarters in Las Vegas is enjoying benefits from a unique selling strategy that the company CEO adopted. In its first years of operation, the company struggled to record profits from its inventory strategy. They later changed their strategy and started holding their own inventory and even moved to Las Vegas to tap into the experienced call center workforce. This move enabled the company to record its first profit with $840 million in its annual sales. In 2010, Hsieh, the company’s CEO agreed to sell the company to Amazon and was keen on ensuring the company maintained its culture. The CEO received opposition from other board members whose focus was on culture and not profits (Daniels Fund Ethics Initiative, 2015).


Daniels Fund Ethics Initiative,. (2015). Zappos: Delivering Happiness to Stakeholders. Retrieved 16 November 2015, from

Hollender, J. (2013). Lessons we can all learn from Zappos CEO Tony Hsieh. the Guardian. Retrieved 16 November 2015, from

Use of JIT systems in Harley Davidson’s operations

Commonly referred to as JIT, ‘Just-In-Time’ is an inventory strategy which is utilized by various companies in order for them to be in the advantageous position of decreasing waste and increasing efficiency by receiving various goods as they are required in the process of production, thus reducing the costs of inventory (Allen, Robinson & Stewart, 2001). This particular method needs the respective producers to accurately forecast demand of the said products. A good example of this type of strategy would be a vehicle manufacturing company which has significantly low levels of inventory, thus forcing them to rely on their respective supply chains to deliver the needed parts so as to build the said vehicles


Allen, J., Robinson, C., & Stewart, D. (2001). Lean manufacturing: A plant floor guide. Society of Manufacturing Engineers. N.p.

Aranoff, G. (2010). No-inventory standard costing for JIT manufacturers: Maximizing backflush costing. Cost Management. Pp. 34 – 37.

CASE SOLUTION: Strategic Outsourcing at Bharti Airtel Limited

  1. How do the different outsourcing agreements work towards building these core competencies?
  2. How would you structure your agreements to address your concerns and capture any advantages you have identified?

How do the different outsourcing agreements work towards building these core competencies?

Outsourcing agreements is what most companies use to spread their cost among its vendors with an aim of redirecting their capital towards company’s strategic goals. Companies can grow their core competencies by restricting management on long term goals, this can be achieved by relieving the management some of the functions to concentrate on key company goals.

Reference,. (2015). Section d group3_bhartiairtel. Retrieved 23 November 2015, from