Booker Jones Analysis Essay

1.A. If the exist of position were to be incorporated into the history pecker (balance tag), then the price of barrel used (Income teaching) can be reduced. From 1960-1961, Booker Jones incrementd its pose produced from 43,000 place to 63,000 barrels. That is 20,000 barrel increased in just one year. The personify per barrels is $31.50. (20,000 * 31.50= $630,000)We can reduce the cost per barrel expense from income statement of $630,000. (-407,000+630,000= 223,000) Therefore, pretax profit would have been $223,000 sort of of net firing of $407,000.B. If the change were make retroactively as of June 1, 1959 then consequence on the balance sheet at the end of 1960Number of barrel in roll in 1960 is 172,000(172,000 barrels * $31.50 = 5,418,000)$5,418,000 is the increased arsenal after incorporated the cost of barrels to inventory. ($5418000 + $4,506,000 = $9,924,000)$9,924,000 is the new ending inventory in 1960Deferring the Aging costs into the inventory balance would i ncrease the crystalise Profit in 1960. This would then increase the Retained Earnings account on the balance sheetEffect on the balance sheet at the end of 1961Number of barrels in inventory in 1961 is 192,000(192,000 barrels * $31.50 = $6,048,000)$6,048,000 is the increased in inventory after incorporating the cost of barrels to inventory ($6,048,000 + $5,030,000 = $11,078,000)$11,078,000 is the new ending inventory in 1960Deferring the Aging costs into the inventory balance would increase the Net Profit in 1960. This would then increase the Retained Earnings account on the balance sheetEffect on the income statement for 19602. We do not believe that Jones went from a profit in 1960 to a loss for1961 because they can capitalize the patented barrels as inventory instead of expense it. Because of the 4 years aging life, it makes sense to capitalize the barrels and expense it as the aging process reduced.7.1. The original Levis stick in argument has a higher return on invested capi tal, meaning it is a good investment in a long run.Column1WholesaleChannelEstimateOriginal LevisStore ChannelEstimate run Profit before Tax46Tax at 40%1.62.4NOPAT2.43.6Fixed AssetFactory PP&E55Distributed PP&E12Total Fixed Asset67Non-Cash Working CapitalCurrent Asset812Current Liability11Cash00Total Non-Cash Working Capital711Invested Capital1318Return on Invested Capital18%20%2. cheer Chain AnalysisProviding strategic direction corporate strategy take into account the perfect fit jean for customersMarket segment for insatiable customers continue market segment by offering customized jeansGenerating customer demand sales, marketing and customer service Increase in profit24% unsatisfied customersProvide more styles, more colors, better fits4224 possible combination of cadence400 prototype pairs stock at Kiosk for customers to try onFulfilling customer demand supply chain, manufacturing, production Order is transmitted today to Levis factory. Each pair of jeans is individually cut 3 years shipping back to customers (at $5 extra charge per pair) Pull ground responsiveness to actual buying patterns, improve manufacturing, and delivery cycle emergency to find ways to fix the 8 months lag between lodge cotton fabric and selling the final pair of jeans. Providing support function Finance, HR, legal and compliance Need additional finance to pay for educate personal clerksNeed to take out loan to finance sign investment of the project In 4 retail store locations