The U.S. Air Force recently destroyed 16 transport planes (refurbished G222 planes) that it had purchased for $486 million in 2011. These transport planes were to be used by Afghanistan’s air force but were abandoned due to persistent high maintenance costs. An Afghanistan company paid $0.06 per pound for the scrap, or a total of […]
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How should the cost of national advertising by Whole Foods impact the performance report (and segment margin) for each store?
October 24, 2014 
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Whole Foods Market, Inc., is a supermarket chain based in Austin, Texas, with 381 stores in the US (it also has stores in the UK and Canada.) Whole Foods specializes in natural and organic food and has annual sales of $13 billion. In October 2014, Whole Foods rolled out its first national advertising campaign in […]
Continue readingHow does outfitting AMC movie theaters with recliners affect the company’s break even point and operating leverage?
July 18, 2014 0 Comments
AMC Entertainment Holdings Inc. is spending millions of dollars to install recliner-seating in its theaters. AMC Entertainment Holdings Inc. is outfitting about 1,800 of its nearly 3,000 auditoriums with recliners for a total cost of about $600 million. The recliners will remove up to two-thirds of the seating capacity in each theater, due to […]
Continue readingHow does cost cutting at Best Buy impact its ROI?
June 28, 2014 0 Comments
Best Buy is struggling to thrive (and some would say it is even struggling to survive) as it competes with online giant Amazon.com. According to a recent article in Forbes, one way Best Buy is aiming to improve its financial outlook is to cut its cost of goods sold through supply chain efficiency gains. Questions […]
Continue readingHow does automated technology in fast food restaurants change the cost structure, break even, and degree of operating leverage?
June 18, 2014 0 Comments
Change is rapidly occurring in the restaurant industry due to a combination of higher labor costs, increased technological capabilities, and other factors. Protesters across the world are calling for fast food restaurants to raise their wages, arguing that the current wages paid to workers are not enough to survive on. Various states and cities have […]
Continue readingAre the costs of owning a car fixed, variable, or mixed?
May 29, 2014 0 Comments
According to a recent news article in the Wall Street Journal (“Mercedes or Ford, It Costs a Lot More Than You Think,” Wall Street Journal, Sunday Journal, March 15, 2014), the average consumer spends more than $760 a month on his/her vehicle and related expenses. Purchase price of the car Finance charges on […]
Continue readingHow will selling more trucks than cars affect automobile manufacturers’ profits?
May 16, 2014 0 Comments
According to a recent article in USA Today (“Crossovers, trucks beating cars in sales,” Alisa Priddle, Detroit Free Press, March 16, 2014), the sales mix for automobile manufacturers such as Ford and GM has shifted to a ratio of approximately 47% cars and 53% trucks. “Trucks” includes light trucks, crossovers, and SUVs. In 1980, cars […]
Continue readingWhat are the direct and indirect costs involved with manufacturing Oscars?
May 12, 2014 0 Comments
The Academy Awards is an annual American awards ceremony honoring achievements in the film industry. Winners receive a statue officially named the “Academy Award of Merit.” However, these statues are much better known by the nickname of “Oscars.” Each Oscar statue weighs 8.5 pounds and takes three to four weeks to manufacture. The statues have […]
Continue readingWhy might Ford be shifting some jobs from Mexico to the United States?
May 1, 2014 0 Comments
Ford is moving production of its 2016 Ford F-650 and F-750 medium-duty trucks to its Ohio Assembly Plant in Avon Lake, near Cleveland, Ohio. Currently those medium-duty trucks are produced in Mexico. Ford will be investing $168 million in the Avon Lake facility to retool the plant since it is currently set up to produce […]
Continue readingHow will the 3.9% increase in FedEx Freight shipping rates impact the breakeven point for an Etsy jewelry artist?
April 24, 2014 0 Comments
FedEx Corp announced that it would be raising its shipping rates by an average of 3.9% on March 31, 2014. The rate change applies to FedEx Freight shipments within and between the United States, Canada, and Mexico. The FedEx Freight segment is a provider of less-than-truckload (LTL) freight services, which is the shipping of relatively […]
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