Why does the accounting profession make a distinction between internally created intangibles

and purchased intangibles?

Compute FIFO, LIFO, and Average Cost some of the information found on a detail inventory
card for Slatkin Inc. for the first month of operations is as follows. (a) From these data compute
the ending inventory on each of the following bases. Assume that perpetual inventory records are
kept in units only. Carry unit cost

Periodic versus Perpetual Entries Chippewas Company sells one product. Presented below is
information for January for Chippewas Company. Jan. 1 Inventory 100 units at $6 each 4 Sale 80
units at $8 each 11 Purchase 150 units at $6.50 each 13 Sale 120 units at $8.75 each 2

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Explain how losses on impaired intangible assets should be reported in income.

Dollar-Value LIFO The dollar-value LIFO method was adopted by King Corp. on January 1,
2010. Its inventory on that date was $160,000. On December 31, 2010, the inventory at prices
existing on that date amounted to $151,200. The price level at January 1, 2010, was 100, and the
price level at December 31, 2010, was 112.

Purchases Recorded Gross and Net some of the transactions of Torres Company during August
are listed below. Torres uses the periodic inventory method. August 10 Purchased merchandise
on account, $12,000, terms 2/10, n/30. 13 Returned part of the purchase of August 10, $1,200,
and received credit on account. 15 Purchase

Sophia Co., a cellular phone company based in Italy, prepares its financial statements in
accordance with iGAAP. In 2010, it reported average assets of €12,500 and net income
€1,125. Included in net income is amortization expense of €120. Under U.S. GAAP,
Sophia’s amortization expense would have been €325. Br

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FIFO, LIFO, and Average Cost Inventory Esplanade Company was formed on December 1,
2009. The following information is available from Esplanade’s inventory records for Product
BAP. Units Unit Cost January 1, 2010 (beginning inventory) 600 $ 8.00 Purchases: January 5,
2010 1,100 9.00

FIFO and LIFO—Periodic and Perpetual The following is a record of Cannondale

Company’s transactions for Boston Teapots for the month of May 2010. (a) Assuming that
perpetual inventories are not maintained and that a physical count at the end of the month shows
510 units on hand, what is the cost of the ending inven

Financial Statement Effects of FIFO and LIFO the management of Tritt Company has asked its
accounting department to describe the effect upon the company’s financial position and its
income statements of accounting for inventories on the LIFO rather than the FIFO basis during
2010 and 2011. The accounting department i

(Inventory Errors) The net income per books of Adamson Company was determined without
knowledge of the errors indicated below. Prepare a work sheet to show the adjusted net income
figure for each of the 6 years after taking into account the inventoryerrors.

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Dollar-Value LIFO Issues Arruza Co. is considering switching from the specific-goods LIFO
approach to the dollar-value LIFO approach. Because the financial personnel at Arruza know
very little about dollar-value LIFO, they ask you to answer the following questions. (a) What is a
LIFO pool? (b) Is it possible to use a L

Capriati Corporation commenced operations in early 2010. The corporation incurred $60,000 of
costs such as fees to underwriters, legal fees, state fees, and promotional expenditures during its
formation. Prepare journal entries to record the $60,000 expenditure and 2010 amortization, if
any.

Braxton Inc. is considering the write-off of a limited life intangible because of its lack of
profitability. Explain to the management of Braxton how to determine whether a write-off is
permitted.

Dollar-Value LIFO Richardson Company cans a variety of vegetable-type soups. Recently, the
company decided to value its inventories using dollar-value LIFO pools. The clerk who accounts
for inventories does not understand how to value the inventory pools using this new method, so,
as a private consultant, you have been

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Compute FIFO, LIFO, Average Cost—Periodic and Perpetual Ehlo Company is a multiproduct
firm. Presented below is information concerning one of its products, the Hawkeye. Compute cost
of goods sold, assuming Ehlo uses: (a) Periodic system, FIFO cost flow. (b) Perpetual system,
FIFO cost flow. (c) Periodic system, LIFO

Indicate the proper accounting for the following items. (a) Organization costs. (b) Advertising
costs. (c) Operating losses.

What is the nature of research and development costs?

Internal Indexes—Dollar-Value LIFO On January 1, 2010, Bonanza Wholesalers Inc. adopted

the dollar-value LIFO inventory method for income tax and external financial reporting
purposes. However, Bonanza continued to use the FIFO inventory method for internal
accounting and management purposes. In applying the LIFO met
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Average Cost, FIFO, and LIFO prepare a memorandum containing responses to the following
items. (a) Describe the cost flow assumptions used in average cost, FIFO, and LIFO methods of
inventory valuation. (b) Distinguish between weighted-average cost and moving-average cost for
inventory costing purposes. (c) Identify th

Indicate whether the following items are capitalized or expensed in the current year. (a) Purchase
cost of a patent from a competitor. (b) Research and development costs. (c) Organizational costs.
(d) Costs incurred internally to create goodwill.

FIFO and LIFO, Income Statement Presentation The board of directors of Oksana Corporation is
considering whether or not it should instruct the accounting department to change from a first-in,
first-out (FIFO) basis of pricing inventories to a last-in, first-out (LIFO) basis. The following
information is available. Sale

Use the information provided in BE12-1. Assume that at January 1, 2012, the carrying amount of
the patent on Celine Dion’s books is $43,200. In January, Celine Dion spends $24,000
successfully defending a patent suit. Celine Dion still feels the patent will be useful until the end
of 2019. Prepare the journal entries

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What are the two main characteristics of intangible assets?

Determining Merchandise Amounts—Periodic Two or more items are omitted in each of the
following tabulations of income statement data. Fill in the amounts that aremissing.

Classification Issues—Intangible Asset Langrova Inc. has the following amounts included in its
general ledger at December 31, 2010. (a) On the basis of the information above, compute the
total amount to be reported by Langrova for intangible assets on its balance sheet at December
31, 2010. Equipment has alternative

Recently, a group of university students decided to incorporate for the purposes of selling a
process to recycle the waste product from manufacturing cheese. Some of the initial costs
involved were legal fees and office expenses incurred in starting the business, state incorporation
fees, and stamp taxes. One student w

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Use the information provided in BE12-7. Assume that the fair value of the division is estimated
to be $750,000 and the implied goodwill is $350,000. Prepare Waters’ journal entry, if
necessary, to record impairment of the goodwill.
Various Inventory Issues The following independent situations relate to inventory accounting. 1.
Kim Co. purchased goods with a list price of $175,000, subject to trade discounts of 20% and
10%, with no cash discounts allowable. How much should Kim Co. record as the cost of these
goods? 2. Keillor Company’s inventory

Karen Austin Corporation has capitalized software costs of $800,000, and sales of this product
the first year totaled $420,000. Karen Austin anticipates earning $980,000 in additional future
revenues from this product, which is estimated to have an economic life of 4 years. Compute the
amount of software cost amortizat

Purchases Recorded Net Presented below are transactions related to Guillen, Inc. May 10
Purchased goods billed at $20,000 subject to cash discount terms of 2/10, n/60 11 Purchased
goods billed at $15,000 subject to terms of 1/15, n/30 19 Paid invoice of May 10 24 Purchased
goods billed at $11,

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In 2010, EZ-Learn Software developed a software package for assisting calculus instruction in
business colleges, at a cost of $2,000,000. Although there are tens of thousands of calculus
students in the market, college instructors seem to change their minds frequently on the use of
teaching aids. Not one package has ye

Compute FIFO, LIFO, and Average Cost Hull Company’s record of transactions concerning
part X for the month of April was as follows. (a) Compute the inventory at April 30 on each of
the following bases. Assume that perpetual inventory records are kept in units only. Carry unit
costs to the nearest cent. (1) First-in,

LIFO Application and Advantages Geddes Corporation is a medium-sized manufacturing

company with two divisions and three subsidiaries, all located in the United States. The Metallic
Division manufactures metal castings for the automotive industry, and the Plastic Division
produces small plastic items for electrical prod

Inventoriable Costs Assume that in an annual audit of Webber Inc. at December 31, 2010, you.
Find the following transactions near the closing date. 1. A special machine, fabricated to order
for a customer, was finished and specifically segregated in the back part of the shipping room on
December 31, 2010. The customer

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Inventoriable Costs—Perpetual Bradford Machine Company maintains a general ledger account

for each class of inventory, debiting such accounts for increases during the period and crediting
them for decreases. The transactions below relate to the Raw Materials inventory account, which
is debited for materials purchased
Alternative Inventory Methods—Comprehensive Belanna Corporation began operations on
December 1, 2010. The only inventory transaction in 2010 was the purchase of inventory on
December 10, 2010, at a cost of $20 per unit. None of this inventory was sold in 2010. Relevant
information is as follows. Ending inventory unit

Purchases Recorded, Gross Method Wizard Industries purchased $12,000 of merchandise on

February 1, 2010, subject to a trade discount of 10% and with credit terms of 3/15, n/60. It
returned $3,000 (gross price before trade or cash discount) on February 4. The invoice was paid
on February 13. (a) Assuming that Wizard use

Inventoriable Costs—Error Adjustments Werth Company asks you to review its December 31,
2010, inventory values and prepare the necessary adjustments to the books. The following
information is given to you. 1. Werth uses the periodic method of recording inventory. A
physical count reveals $234,890 of inventory on hand

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Classification Issues—Intangibles Presented below is selected account information related to

Matt Perry Inc. as of December 21, 2010. All these accounts have debit balances. Cable
television franchises Film contract rights Music copyrights Customer lists Research and
development costs Prepaid expenses Goodwill Covena

Kenoly Corporation owns a patent that has a carrying amount of $300,000. Kenoly expects
future net cash flows from this patent to total $210,000. The fair value of the patent is $110,000.
Prepare Kenoly’s journal entry, if necessary, to record the loss on impairment.

What should be the pattern of amortization for a limited life intangible?

Explain the difference between artistic-related intangible assets and contract-related intangible
assets.

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Research and development activities may include (a) Personnel costs, (b) Materials and
equipment costs, and (c) Indirect costs. What is the recommended accounting treatment for these
three types of R & D costs?

Inventoriable Costs You is asked to travel to Milwaukee to observe and verify the inventory of
the Milwaukee branch of one of your clients. You arrive on Thursday, December 30, and find
that the inventory procedures have just been started. You spot a railway car on the sidetrack at
the unloading door and ask the wareho

What are factors to be considered in estimating the useful life of an intangible asset?
Gershwin Corporation obtained a franchise from Sonic Hedgehog Inc. for a cash payment of
$120,000 on April 1, 2010. The franchise grants Gershwin the right to sell certain products and
services for a period of 8 years. Prepare Gershwin’s April 1 journal entry and December 31
adjusting entry.

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General Inventory Issues In January 2010, Susquehanna Inc. requested and secured permission
from the commissioner of the Internal Revenue Service to compute inventories under the last-in,
first-out (LIFO) method and elected to determine inventory cost under the dollar-value LIFO
method. Susquehanna Inc. satisfied the c

Accounting Treatment of Purchase Discounts Shawnee Corp., a household appliances dealer,

purchases its inventories from various suppliers. Shawnee has consistently stated its inventories
at the lower of cost (FIFO) or market. Shawnee is considering alternate methods of accounting
for the cash discounts it takes when pa

Inventoriable Costs Frank Erlacher, an inventory control specialist, is interested in better

understanding the accounting for inventories. Although Frank understands the more
sophisticated computer inventory control systems, he has little knowledge of how inventory cost
is determined. In studying the records of Strider

Simon Company determines that its goodwill is impaired. It finds that its implied goodwill is
$360,000 and its recorded goodwill is $400,000. The fair value of its identifiable assets is
$1,450,000. What is the amount of goodwill impaired?

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LIFO Choices Wilkens Company uses the LIFO method for inventory costing. In an effort to
lower net income, company president Lenny Wilkens tells the plant accountant to take the
unusual step of recommending to the purchasing department a large purchase of inventory at
year-end. The price of the item to be purchased has

Izzy Inc. purchased a patent for $350,000 which has an estimated useful life of 10 years. Its
pattern of use or consumption cannot be reliably determined. Prepare the entry to record the
amortization of the patent in its first year of use.

Waters Corporation purchased Johnson Company 3 years ago and at that time recorded goodwill
of $400,000. The Johnson Division’s net assets, including the goodwill, have a carrying
amount of $800,000. The fair value of the division is estimated to be $1,000,000. Prepare
Water’s journal entry, if necessary, to record

What is good will? What is negative goodwill?

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FIFO and LIFO—Periodic Tom Brady Shop began operations on January 2, 2010. The
following stock record card for footballs was taken from the records at the end of the year. A
physical inventory on December 31, 2010, reveals that 110 footballs were in stock. The
bookkeeper informs you that all the discounts were taken.

Dollar-Value LIFO Presented below is information related to Martin Company. Compute the
ending inventory for Martin Company for 2007 through 2012 using the dollar-value
LIFOmethod.

In 2010 Ghostbusters Corp. spent $420,000 for “goodwill” visits by sales personnel to key
customers. The purpose of these visits was to build a solid, friendly relationship for the future
and to gain insight into the problems and needs of the companies served. How should this
expenditure be reported?

Briefly discuss the convergence efforts that are underway in the area of intangible assets.

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Recording and Amortization of Intangibles Power glide Company, organized in 2009, has set up
a single account for all intangible assets. The following summary discloses the debit entries that
have been recorded during 2010. Prepare the necessary entries to clear the Intangible Assets
account and to set up separate acco

In examining financial statements, financial analysts often write off goodwill immediately.
Evaluate this procedure.

FIFO and LIFO—Periodic and Perpetual Inventory information for Part 311 of Seminole Corp.
discloses the following information for the month of June. June 1 Balance 300 units @ $10 June
10 Sold 200 units @ $24 11 Purchased 800 units @ $11 15 Sold 500 units @ $25 20 Purchased
500 units @ $13

Inventory Errors—Periodic Thomason Company makes the following errors during the current
year. (In all cases, assume ending inventory in the following year is correctly stated.) 1. Both
ending inventory and purchases and related accounts payable are understated. (Assume this
purchase was recorded and paid for in the

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FIFO and LIFO Harrisburg Company is considering changing its inventory valuation method
from FIFO to LIFO because of the potential tax savings. However, the management wishes to
consider all of the effects on the company, including its reported performance, before making the
final decision. The inventory account, curre

Which of the following activities should be expensed currently as R & D costs? (a) Testing in
search for or evaluation of product or process alternatives. (b) Engineering follow-through in an
early phase of commercial production. (c) Legal work in connection with patent applications or
litigation, and the sale or licen

Intangibles have either a limited useful life or an indefinite useful life. How should these two
different types of intangibles be amortized?

An article in the financial press stated, “More than half of software maker Comserve’s net
worth is in a pile of tapes and ring-bound books. That raises some accountants’
eyebrows.” What is the profession’s position regarding the incurrence of costs for
computer software that will be sold?

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In 2009, Austin Powers Corporation developed a new product that will be marketed in 2010. In
connection with the development of this product, the following costs were incurred in 2009:
research and development costs $400,000; materials and supplies consumed $60,000; and
compensation paid to research consultants $125,00

Intangible Amortization Presented below is selected information for Palmiero Company. 1.

Palmiero purchased a patent from Vania Co. for $1,500,000 on January 1, 2008. The patent is
being amortized over its remaining legal life of 10 years, expiring on January 1, 2018. During
2010, Palmiero determined that the economic

LIFO Inventory Advantages Jane Yoakam, president of Estefan Co., recently read an article that
claimed that at least 100 of the country’s largest 500 companies were either adopting or
considering adopting the last-in, first-out (LIFO) method for valuing inventories. The article
stated that the firms were switching to

LIFO Effect The following example was provided to encourage the use of the LIFO method. In a
nutshell, LIFO subtracts inflation from inventory costs, deducts it from taxable income, and
records it in a LIFO reserve account on the books. The LIFO benefit grows as inflation widens
the gap between current-year and past-ye

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Accounting for Organization Costs Fontenot Corporation was organized in 2009 and began
operations at the beginning of 2010. The company is involved in interior design consulting
services. The following costs were incurred prior to the start of operations. (a) Compute the total
amount of organization costs incurred by F

An intangible asset with an estimated useful life of 30 years was acquired on January 1, 2000, for
$540,000. On January 1, 2010, a review was made of intangible assets and their expected service
lives, and it was determined that this asset had an estimated useful life of 30 more years from the
date of the review. What
If intangibles are acquired for stock, how is the cost of the intangible determined?

As a luggage store owner, you are planning a complete renovation of the attaché case
department. What decisions must you make?

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Which is more difficult, implementing a merchandise plan for a small bookstore or Costco?
Explain your answer.

Are the steps in setting up a retail organization the same for small and large retailers? Explain
your answer.

What difficulties are there in using a rating scale such as that shown in Figure 10-7? What are the
benefits?

Inventory Adjustments Dimitri Company, a manufacturer of small tools, provided the following
information from its accounting records for the year ended December 31, 2010. Additional
information is as follows. 1. Included in the physical count were tools billed to a customer f.o.b.
shipping point on December 31, 2010. T

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Explain the basic premise of the retail method of accounting. Present an example.

A retailer has net sales of $1,075,000, net profit of $185,000, total assets of $600,000, and a net
worth of $225,000. a. Calculate asset turnover, profit margin, and return on assets. b. Compute
financial leverage and return on net worth. c. Evaluate the financial performance of this retailer.

What are the advantages and disadvantages of a centralized buying organization?

At the end of the year, the retailer in question 8 determines that actual operating expenses are
$160,000, actual profit is $120,000, and actual sales are $650,000. What is the maintained
markup percentage? Explain the difference in your answers to questions 8 and 9.

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What is zero-based budgeting? Why do most retailers utilize incremental budgeting, despite its
limitations?

Distinguish between capital spending and operating expenditures. Why is this distinction
important to retailers?

Why use sophisticated weather forecasting services if daily weather predictions tend to be
inaccurate?
How would you supervise and motivate a 19-year-old Old Navy employee? A 55-year-old
cashier?

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How could a seasonal retailer improve its cash flow during periods when it must buy goods for
future selling periods?

Cite the advantages and disadvantages associated with these merchandise sources for your
regular fast-food outlet. How would your answers differ for a global apparel chain? a. Company-
owned. b. Outside, regularly used. c. Outside, new.

Differentiate among the central business district, the secondary business district, the
neighborhood business district, and the string.

The sales of a full-line discount store are listed. Calculate the monthly sales indexes. What do
they mean?

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Why are employee needs important in developing a retail organization?

Present a checklist of five factors for a chain retailer to review in determining how to allocate
merchandise among its stores.

What potential problems may result if a retailer relies on its computer system to implement too
many actions (such as employee scheduling or inventory reordering) automatically?

What factors should retailers consider when assessing opportunity costs?

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A retailer has a beginning monthly inventory valued at $100,000 at retail and $61,000 at cost.
Net purchases during the month are $190,000 at retail and $115,000 at cost. Transportation
charges are $10,500. Sales are $225,000. Markdowns and discounts equal $30,000. A physical
inventory at the end of the month shows mer

How would small and large retailers act differently for each of the following? a. Diversity. b.
Recruitment. c. Selection. d. Training. e. Compensation. f. Supervision.

Present a community relations program for an optical chain.

Define the concept of atmosphere. How does this differ from that of visual merchandising?

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Why should a local appliance store designate control units, even though this may be time
consuming?

Interview a local store owner and determine how he or she makes merchandise decisions.
Evaluate that approach.

Explain why markups are usually computed as a percentage of selling price rather than of cost.

Present a seven-item checklist for a retailer to use with its reverse logistics.

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Cite at least five objectives a large consumer electronics chain should set when setting up its
organization structure.

Why is it important for retailers to understand the concept of price elasticity even if they are
unable to compute it?

Describe the relationship of assets, liabilities, and net worth for a retailer. How is a balance sheet
useful in examining these items?

What is the distinction between merchandising functions and the buying function?

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The FIFO method seems more logical than the LIFO method, because it assumes the first
merchandise purchased is the first merchandise sold. So, why do many more retailers use LIFO?

How can retailers attract and retain more women and minority workers?

Present five recommendations for retailers to improve their accounting and financial reporting
practices with regard to disclosure ("transparency") of all relevant information to stockholders
and others.

Present a five-step plan for a retailer to reassure customers that it is safe to shop there.

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How could a store selling new computers project a value-based retail image? How could a store
selling used computers project such an image?

Under what circumstances should a retailer try to charge slotting allowances? How may this
strategy backfire?

What problems can occur while interviewing and testing prospective employees?
How could a neighborhood pizzeria be prepared for the variations in customer demand for home
delivery during the day?

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What are the benefits of quick response inventory planning? What do you think are the risks?

How could a convenience store use a basic stock list, a model stock plan, and a never-out list?

Describe the goals of a compensation plan (both direct and indirect components) in a retail
setting.

Evaluate a regional shopping center near your campus.

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What do you think are the risks of placing too much reliance on merchandising software? Do the
risks outweigh the benefits? Explain your answer.

Outline the contingency plan a retailer could have in the event of each of these occurs: a. A
shopper's accidentally setting off the burglar alarm. b. A flood in the store caused by a ruptured
water pipe. c. A firm's Web site inadvertently making personal customer information available to
a mailing list company. d.

The store in question 10 and 11 knows its cost complement for all merchandise purchased last
year was 0.61; it projects this to remain constant. It expects to begin and end December with
inventory valued at $140,000 at retail and estimates December reductions to be $18,000. The
firm already has purchase commitments for

What is a megamall? What is a lifestyle center? Describe the strengths and weaknesses of each.

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A floor tile retailer wants to receive a 35 percent markup (at retail) for all merchandise. If one
style of tile retails for $11 per tile, what is the maximum that the retailer would be willing to pay
for a tile?

Contrast the weeks' supply method and the percentage variation method of merchandise
planning.

A gas station does not accept checks because of the risks involved. However, it does accept Visa
and MasterCard. Evaluate this strategy.

Is micro merchandising a good approach? Why or why not?

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What are meant by selling, merchandise, personnel, and customer space?

Comment on this statement: "The quality of store maintenance efforts affects consumer
perceptions of the retailer, the life span of facilities, and operating expenses."

A retailer has yearly sales of $900,000. Inventory on January 1 is $360,000 (at cost). During the
year, $660,000 of merchandise (at cost) is purchased. The ending inventory is $325,000 (at cost).
Operating costs are $90,000. Calculate the cost of goods sold and net profit, and set up a profit-
and-loss statement. There

What criteria should a small retailer use in selecting a general store location and a specific site
within it? A large retailer?

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What are the pros and cons of everyday low pricing to a retailer? To a manufacturer?

Explain why a one-hundred percent location for discount apparel chain may not be a one-
hundred percent location for a moderate-priced apparel store.

What is the basic premise of category management? Why do you think that supermarkets have
been at the forefront of the movement to use category management?

A gift store charges $25.00 for a ceramic figurine; its cost is $14.00. What is the markup
percentage (at cost and at retail)?

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What are the pros and cons of prototype stores? For which kind of firms is this type of store most
desirable?

Is too low a financial leverage good or bad? Why?

Present a brief operations blueprint for a consumer electronics repair service.

Which aspects of a store's exterior are controllable by the retailer? Which are uncontrollable?

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A retailer buys items for $65. At an original retail price of $89, it expects to sell 1,000 units. a. If
the price is marked down to $79, how many units must the retailer sell to earn the same total
gross profit it would attain with an $89 price? b. If the price is marked up to $99, how many units
must the retailer s
If the planned average monthly stock for the discount store in question10 is $420,000 (at retail),
how much inventory should be planned for August if the retailer uses the percentage variation
method? Comment on this retailer's choice of the percentage variation method.

Distinguish between these two terms: logistics and inventory management. Give an example of
each.

Present a plan for the ongoing training of both existing lower-level and middle-management
employees without making it seem punitive.

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A car dealer purchases multiple-disc CD players for $100 each and desires a 35 percent markup
(at retail). What retail price should be charged?

Why is it sometimes difficult for a retailer to convey its image to consumers? Give an example
of a restaurant with a fuzzy image.

A firm has planned operating expenses of $200,000, a profit goal of $130,000, and planned
reductions of $35,000 and expects sales of $700,000. Compute the initial markup percentage.

What information should a department store gather before adding a new watch brand to its
product mix?

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How can a convenience store increase its asset turnover?

Develop a brief plan to revitalize a neighborhood business district nearest your campus.

How should a major appliance repair service use the product life-cycle concept?

Which retailers can best use a perpetual inventory system based on the cost method? Explain
your answer.

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What operations criteria would you use to evaluate the success of self-scanning at a
supermarket?

Describe and evaluate the merchandising philosophy of your favorite online retailer.

Are the minimum job expectations of entry-level workers and middle-level managers similar or
dissimilar? What about the desired goals? Explain your answers.

What are the pros and cons of a retailer's relying too much on a want book?
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Do you agree with upscale retailers' decision not to provide in-store shopping carts? What
realistic alternatives would you suggest? Explain your answers.

From the retailer's perspective, compare the advantages of locating in unplanned business
districts versus planned shopping centers.

Under what circumstances do you think unbundled pricing is a good idea? A poor idea? Why?

Give an example of a price strategy that integrates demand, cost, and competitive criteria.

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What are the trade-offs in a retailer's deciding how much to emphasize private brands rather than
manufacturer brands?

Why are the job description and the application blank so important in employee selection?

How can these retailers improve productivity? a. Travel agency. b. Neighborhood restaurant. c.
College bookstore. d. Upscale luggage store.

Are there any operating functions that should never be outsourced? Explain your answer.

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What is vendor-managed inventory? How do both manufacturers and retailers benefit from its
use?

Talk to two local retailers and ask them what they have done to maximize their energy
efficiency. Present your findings.

Differentiate between an IPO and an LBO.

Why would a retailer be interested in job standardization and cross-training for its employees?

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Comment on each of the following from the perspective of a large retailer. a. Horizontal price
fixing. b. Vertical price fixing. c. Price discrimination. d. Minimum-price laws. e. Unit pricing.

Devise a checklist a retailer could use to negotiate opportunistic buying terms with suppliers.

Present two situations in which it would be advisable for a retailer to take a markdown instead of
carry over merchandise from one budget period to another.

What is the value of a percentage profit-and-loss statement?

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Why are some retailers convinced that distribution centers must be used as the shipping points
for merchandise from manufacturers while other retailers favor direct store distribution?

Under what circumstances could a retailer carry a wide range of merchandise quality without
hurting its image? When should the quality of merchandise carried be quite narrow?

How could a neighborhood paint supply store engage in solutions selling?

What policies would you set for eBay in deciding which products and sellers to be listed at the
Web site?

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What can any retailer learn from this case?

What factors account for the large increase in coupon redemptions? Will the growth continue?
Why or why not?

What terms of occupancy are especially important for retailers locating at nontraditional sites?

Describe the greatest similarities and differences in the organization structures of small
independents, chain retailers, and diversified retailers.

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Discuss the pros and cons of enhanced technology from both retailer and customer perspectives.

Develop a checklist for an upscale sporting goods chain to coordinate its promotional plan.

Today, eBay offers products in two ways: through auctions and through set prices. Comment on
this approach.

Do you think that consumers know-or care-which outlets are owned by Starbucks and which are
franchised? Explain your answer.

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As it looks to the future, what opportunities and threats does Best Buy need to recognize and act
upon?

What are the major types of retailers with which Best Buy competes? How should best Buy deal
with each type?

Describe how digital coupons offered by manufacturers shift channel power to the manufacturer.
Based on the information in this case and at Starbucks' Web site (www.starbucks.com) describe
the market segment(s) to which the firm appeals. What attracts the segment(s) to Starbucks?

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Why is it imperative for a firm to view its strategy as an integrated and ongoing process?

Describe several uncontrollable factors that impact A&F.

Are there any retailers that should not use sales promotion? Explain your answer.

How can foreign retailers successfully position themselves in China?

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Evaluate Ahold's overall retail strategy.

Are manufacturer-based coupons an example of channel cooperation or channel conflict?

Explain your answer.

Develop a 10-item retail audit form for Best Buy to use in assessing the performance of its sales
personnel

How can a convenience store become a destination retailer?

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Distinguish among the following auditors. Under what circumstances would each be preferred?
a. Outside auditor b. Company audit specialist c. Company department manager

How would an advertising plan for an online-only cosmetics retailer differ from that of a bricks-
and-mortar cosmetics store chain?

What is the current role of each of the traditional communications tools for retailers: advertising,
public relations, personal selling, and sales promotion?

What is the impact of company size on the use of automated retail machines.

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What is benchmarking? Present a five-step procedure to do retail benchmarking.

Discuss the pros and cons of evaluating a retailer's success using same store sales growth data.

What can any retailer learn from this case?

What can any retailer learn from this case?

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How can a retailer respond to the trends identified in this case to best reach consumers who are
still having a tough time a result of weak economic conditions?

Provide three of your own examples of shopper marketing that are beneficial for both
manufacturers and retailers.

What actions must the retailers you examined for Question 6 undertake to better coordinate their
store-based and Web-based efforts (multi-channel retailing)?

How do manufacturer and retailer cooperative advertising goals overlap? How do they differ?

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For each of these promotional objectives, explain how to evaluate promotional effectiveness: a.
To increase impulse purchases of magazines. b. To project an innovative image. c. To maintain
customer loyalty rates.

Distinguish between horizontal and vertical retail audits. Develop a vertical audit form for an
auto repair retailer.

How can a global retailer exert greater oversight with the personnel in its foreign stores?

What sales promotions should Best Buy use for the Insignia brand? Explain your answer.

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What other trends should retailers consider in planning for the future?

At what stage in the retail life cycle are most convenience stores? Explain your answer.

Apply the concept of the consumer decision process to Starbucks.

Why do you think that so many other apparel retailers have outperformed Gap?

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Based on what criteria could Camden Food Co. determine if an airport was a one-hundred
percent location for one of its store?

Relate the wheel of retailing and scrambled merchandising to at least two of the retailers
highlighted in this case.

What is converged retailing? Why have many retailers not adopted it yet?