In class, we discussed the differences between a contribution income statement versus the traditional approach (absorption which is gaap). there is no difference in operating income between the two: • if it is a merchandising company since all cost of goods sold are variable. • manufacturing company when the units produced are the same as the units sold. however, the operating income will be different for a manufacturing company when the units produced do not equal the units sold. if a manufacturing company sells a lot of inventory that was produced in a previous year, the fixed manufacturing overhead associated with the inventory that was on the balance sheet will be expensed under the traditional approach and under the contribution margin approach the fixed manufacturing overhead with the units sold was expensed in the previous year since fixed expenses are expensed when incurred. therefore, based on the previous paragraph, when inventory levels decrease, under which approach will show a higher operating income?

Chipotle mexican grill, the american mexican food chain restaurant, opened its first restaurant in the united states in 1993. in 2010, chipotle opened its first restaurant in the united kingdom in london on charing cross. by late may 2013, the company had 6 restaurants in london, but they have not been doing well even though the british have taken a liking to mexican food (boyle, 2013). why has this successful u. s. chain not seen the same success overseas? if you were chipotle's ceo, how would you fix this situation? what is an alternative means of venturing outside of its domestic markets that may allow for a competitive advantage? then, pick a company that has not yet expanded overseas, or if it has expanded, suggest a different strategy for entrance into an overseas market that you feel would be more strategic for the company. research its rivals in the global marketplace and market conditions in the overseas market you are targeting. justify your recommended entry strategy based on these industry and market conditions.

Laws corporation is considering the purchase of a machine costing $16,000. estimated cash savings from using the new machine are $4,120 per year. the machine will have no salvage value at the end of its useful life of six years and the required rate of return for laws corporation is 12%. the machine's internal rate of return is closest to (ignore income taxes) (a) 12% (b) 14% (c) 16% (d) 18%

Turrubiates corporation makes a product that uses a material with the following standards standard quantity 8.0 liters per unit standard price $2.50 per liter standard cost $20.00 per unit the company budgeted for production of 3,800 units in april, but actual production was 3,900 units. the company used 32,000 liters of direct material to produce this output. the company purchased 20,100 liters of the direct material at $2.6 per liter. the direct materials purchases variance is computed when the materials are purchased. the materials quantity variance for april is: