Tag Archives: relevant costs

Why would Boeing outsource its electronics production and then brings its manufacture back in-house?

In the early 2000s, The Boeing Company (NYSE: BA) outsourced key portions of its aircraft manufacturing and design operations, including electronics and central computers. Beginning in 2007, Boeing’s 787 Dreamliner (a new model for Boeing) was assembled in the U.S., with global subcontractors assigned the work of assembling key sections of the 787. Subcontractors also […]

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What costs would the New England Patriots have considered when analyzing the purchase of team planes and when pricing the rental of its team planes?

The New England Patriots recently became the first National Football League (NFL) franchise to buy its own team aircraft. The Patriots purchased two Boeing 767 planes for a total of about $10 million. Both planes have been painted with the team’s logo and colors. The Patriots will use the planes for the ten round trips […]

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What information is relevant when deciding whether to laser tattoo fruits and vegetables instead of using paper or plastic stickers?

Every piece of fruit and vegetables sold in U.S. grocery stores has a small sticker on it. These stickers include food type, origin, and whether it was grown organically. Laser Food is a company based in Spain that makes laser marking machines. These Laser Mark machines tattoo every piece of fruit and vegetable with identifying […]

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What managerial accounting tools could be used by Giant Eagle to evaluate whether it should put refrigerator doors in its dairy section?

Giant Eagle is a grocery store chain with stores located in Indiana, Maryland, Ohio, Pennsylvania, and West Virginia. Recently, it installed refrigerator doors on the dairy section in many of its stores. Previously, the dairy section was refrigerated but had no doors. The refrigerator doors will reportedly use 78% less energy than the amount of […]

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What costs would be relevant when Amazon considers whether to operate its own cargo freight service?

Since its inception, Amazon has relied on third-party shippers, such as UPS and FedEx.  In 2013, Amazon experienced a wave of last-minute orders and bad weather left UPS and other shippers unable to deliver Amazon’s packages.  Amazon issued apologies and $20 gift cards to customers, but its reputation suffered from the unhappy customers who were […]

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What type of responsibility center would a Kohl’s Café within the department store be considered?

In an effort to increase the number of shoppers coming into its stores and the length of time those shoppers stay, Kohl’s (KSS) is adding a small café (Kohl’s Café) to each of two of its department stores in the Milwaukee, Wisconsin area. Each café will sell Caribou Coffee items including lattes, cappuccinos, and other […]

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What costs are relevant when pricing a cargo ship cruise?

Challenging economic conditions in several countries have pushed freight ship companies to look for additional sources of revenues in addition to the revenue generated by hauling freight across the ocean.  In recent years, one additional source of revenue for these freight companies has been to take on cruise passengers in addition to regular cargo. Generally […]

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Should the original cost of the planes for Afghanistan’s air force purchased by the U.S. Air Force influence its decision to scrap those planes?

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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Why might Ford be shifting some jobs from Mexico to the United States?

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 […]

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Should the town of Allentown, PA, outsource its pension check-writing?

For years, the City of Allentown, PA, has had its payroll clerk write the pension checks to its retirees every two weeks. The pension check-writing system is based in an older accounting system that was installed in 1983.  The only person who has been trained to use the older accounting system to write the pension […]

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