Week 2 Assignment for Phyllis Young

CASE

CASE 3-1 Brant Freezer Company

Located in Fargo, North Dakota, the Brant Freezer Company manufactures industrial freezers. These freezers come in one size and are distributed through public warehouses in Atlanta, Boston, Chicago, Denver, Los Angeles, Portland, and St. Louis. In addition, some space is used in the company’s Fargo warehouse. Young Joaquin (J. Q.) Brant, with a fresh M.B.A. degree from the University of South Alabama, returned to the family firm, where he had once worked during summers. On his first day of work, J. Q. met with his father. His father complained that they were being “eaten alive” by warehousing costs. The firm’s controller drew up a budget each year, and each warehouse’s monthly activity (units shipped) and costs were tallied.

EXHIBIT 3-A Brant Freezer Warehouse Performance

Exhibit 3-A shows actual 2009 figures for all warehouses, plus actual figures for the first five months of 2010. Projected 12-month 2010 budgets and shipments are also included. Exhibit 3-B shows the income statement for 2009. Exhibit 3-C is the 2009 balance sheet. If you are familiar with Excel or other spreadsheet software, you might try using it to answer the following questions.

EXHIBIT 3-B Brant Freezer 2009 Income Statement

EXHIBIT 3-C Brant Freezer 2009 Balance Sheet

1. When comparing performance during the first five months of 2010 with performance in 2009, which warehouse shows the most improvement?

5. The year 2010 is nearly half over. J. Q. is told to determine how much the firm is likely to spend for warehousing at each of the eight warehouses for the last six months in 2010. Do his work for him.