New Look Jacket Inc.: Variance Analysis

The current cost system allocates overhead costs once a year, as a function of direct labor dollars. This allocation strategy results in:

3. Explain two methods that can be used in order to identify realistic estimations when developing a budget. [2.2]

The background of this paper we need to mention is that West Coast Fashions, Inc. (WCF), a large designer and marketer of branded apparel announced a strategic reorganization calling for a divestiture of certain assets, and one of the divisions it intended to shed was Mercury Athletic, its wholly owned footwear subsidiary. John Liedtke, the head of business development for Active Gear, Inc. (AGI), a privately held athletic and casual footwear company, contemplated an acquisition opportunity of Mercury that would significantly improve his business. So, he wanted to evaluate this opportunity.

WeaveTech, formally known as Johnson-Ware is a military and security apparel company entering into the high-end performance clothing market. Before the acquisition by CVX Partners, WeaveTech which was formed in 1905, relied exclusively on the military (70%) and security (30%) customer base. The need to change the company’s customer base from military and security to high-end performance clothing market apparently arose from the allure of the later market segment and the dwindling growth of the military and security market (Beer & Swiercz, 2015). The departure of Jack Davidson, a retired US Navy Rear Admiral, and WeaveTech CEO from 1983 to 2012 in addition to the conclusion of the Afghanistan and Iraq Wars meant that the traditional market was losing its reliability. Due to the unreliability, there was a need to redesign the customer base and to take advantage of the high-end market segment.

The projected costs in the last six months of 2004 (column 4) are calculated by subtracting the actual costs for the first five months of 2004 (column 2) from 2004’s projected total costs (column 3). This gives us the projected costs for the last seven months of 2004. However, we are only interested in the last six months of 2004, so

Q2. Using budget data, what was the total expected cost per unit if all manufacturing and shipping overhead (both variable and fixed) was allocated to planned production? What was the actual per unit cost of production and shipping?

Analysis of variance is a term used in statistics which involves a collection of statistical models and procedures that are associated with them where the observed variance in a particular variable is partitioned into components that can be attributed to different sources of variations. it is therefore a statistical technique that is useful for evaluation whether there are differences between average values or mean across several population groups, It can simply be defined as a statistical test that of whether or not the means associated with several groups are all equal and hence it generalizes t-tests to more than two groups. If multiple t-tests are two are used there would be increased chances of type one error being committed for that reason variance analysis is a useful for a comparison of two, three or more means. This model operates by comparing the amounts of dispersion that is experienced by each of the groups to the total amount of dispersion in the data (Lowry, 2012)

|2.2 Explain the purpose of using estimations when developing a budget and ways of doing so |Question 2 Page 3 |

First research objective was to determine whether it is profitable for J.Crew to shift their brand focus to a ‘sustainablity’ business model instead of resuming their position in the fast fashion industry.

3. Explain two methods that can be used in order to identify realistic estimations when developing a budget. [2.2]

NLJ produces and sells two lines of jackets: nylon and leather. The market for nylon

This trait can be leveraged to build systems on par with the new technologies. An addition of 25% of personnel, expert in modern technologies and equipments would enhance the ability of the firm to start an e-business system that would enable LBS Textiles make a global presence, capture the national and international markets. Increase in the number of clients that LBS Textiles can reach out to will increase the volume of trade. The increase in trade brings in direct returns to the company. The expansion of markets and increase in clients indirectly increases the volume of sales and aid in boosting the returns to LBS Textiles. The company needs to evaluate the demand of the various demographics across the globe and develop newer attractive designs. The Research of newer technologies or designs to attract newer markets and wider demographics will incur expenses but the successful outcomes when channelized through the development teams produce the actual product for direct revenue generation.

Fifteen conveniently sampled students (9 females and 6 males) from Oregon State University agreed to participate in a survey questionnaire. Participants were selected from an upper division summer statistics course at OSU; no compensation was offered or given. Age range of the participants was 19-28, and ethnic backgrounds included Caucasian, Pacific Islander, and Asian. All participants were undergraduate students.

Vera Bradley’s company strategy is not working very well. Their company strategy involves offering a distinctive line of colorful women’s luggage, handbags and accessories. Sales are done through department stores and over the Internet. The company’s vision and mission is not clear. The company would like to open 300 full-time retail stores and 100 factory outlet stores. The goal is to sell approximately 40% of product sold in the factory outlet stores. The total handbag and accessory market consists of the following segments:

In this portfolio project assignment there will be an analysis of Coach Inc., which has a company ticker symbol of COH, and a close competitor Michael Kors Holdings Limited, ticker symbol of KORS. First, there will be a review on the ratio analysis on the results and rationale for the items selected. Second, there will be a horizontal and vertical analysis for Coach Inc. on the income statement and the balance sheet. Third, there will be a review of at least four items from the management discussion and analysis (MD&A) from the 10K annual report for Coach Inc. that will closely reflect and support the review and financial results. Coach Inc. has been a high end accessory company for many years, but there are times where companies need to ‘change it up” in order to stay a top leader in the brand, and this analysis will reflect the necessity of these changes.