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 companys Fargo warehouse Young Joaquin (J Q ) Brant, with a fresh MBA 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 firms controller drew up a budget each year, and each warehouses monthly activity (units shipped) and costs were tallied Exhibit 3 A shows actual 2016 figures for all warehouses, plus actual figures for the first five months of 2017 Projected 12 month 2017 budgets and shipments are also included Exhibit 3 B shows the Income Statement for 2016 Exhibit 3 C is the 2016 Balance Sheet If you are familiar with Excel or other spreadsheet software, you might try using it to answer the following questions Exhibit 3 A Brant Freezer Warehouse Performance 2016 Figures 2017 Figures Units Shipped Warehouse Costs Units Shipped Warehouse Costs 12 Months Jan Dec 5 Months through May 31 12 Months Jan Dec 5 Months through May 31 Projected 12 Months Jan Dec Actual 5 Months May 31 Budgeted 12 Months Jan Dec Actual Costs through May 31 Atlanta 17,431 4,080 156,830 35,890 18,000 4,035 178,000 40,228 Boston 6,920 3,061 63,417 27,915 7,200 3,119 73,000 29,416 Chicago 28,104 14,621 246,315 131,618 30,000 15,230 285,000 141,222 Denver 3,021 1,005a 28,019 8,600 3,100 1,421 31,000 14,900 Fargo 2,016 980 16,411 8,883 2,000 804 17,000 9,605 Los Angeles 16,491 11,431 151,975 109,690 17,000 9,444 176,000 93,280 Portland 8,333 4,028 73,015 36,021 9,000 4,600 85,000 42,616 St Louis 5,921 2,331 51,819 23,232 8,000 2,116 56,000 19,191 aDenver warehouse closed by strike March 419, 2016 Figure 3 A Full Alternative Text Exhibit 3 B Brant Freezer Company Income Statement Income Statement 2016 Sales $4,003,450 Cost of goods sold $937,000 Gross Margin $3,066,450 Transportation cost $657,322 Warehousing cost $735,982 Inventory carrying cost $567,987 Other operating costs $345,876 Total operating cost $2,307,167 Earnings before interest and taxes $759,283 Interest $110,000 Taxes $69,000 Net Income $580,283 Figure 3 B Full Alternative Text Exhibit 3 C Brant Freezer Company Balance Sheet Balance Sheet 2016 Assets Cash $706,034 Accounts Receivable $355,450 Inventory $1,590,435 Total Current Assets $2,651,919 Net Fixed Assets $803,056 Total Assets $3,454,975 Liabilities Current Liabilities $1,678,589 Long term Debt $398,060 Total Liabilities $2,076,649 Shareholders Equity $1,378,326 Total Liabilities and Equity $3,454,975 Questions When comparing performance during the first five months of 2017 with performance in 2016, which warehouse shows the most improvement When comparing performance during the first five months of 2017 with performance in 2016, which warehouse shows the poorest change in performance When comparisons are made among all eight warehouses, which one do you think does the best job for the Brant Company What criteria did you use Why J Q is aggressive and is going to recommend that his father cancel the contract with one of the warehouses and give that business to a competing warehouse in the same city J Q feels that when word of this gets around, the other warehouses they use will shape up Which of the seven should J Q recommend be dropped Why The year 2017 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 2017 Do his work for him When comparing the 2016 figures with the 2017 figures shown in the table, the amount budgeted for each warehouse in 2017 was greater than actual 2016 costs How much of the increase is caused by increased volume of business (units shipped) and how much by inflation Use the 2016 Income Statement and Balance Sheet to complete a Strategic Profit Model for J Q Holding all other information constant, what would be the affect on ROA for 2017 if warehousing costs declined 10 from 2016 levels Important note Please Write by microsoft word (text)

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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

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 companys Fargo warehouse. Young Joaquin (J. Q.) Brant, with a fresh MBA 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 firms controller drew up a budget each year, and each warehouses monthly activity (units shipped) and costs were tallied.

Exhibit 3.A shows actual 2016 figures for all warehouses, plus actual figures for the first five months of 2017. Projected 12-month 2017 budgets and shipments are also included. Exhibit 3.B shows the Income Statement for 2016. Exhibit 3.C is the 2016 Balance Sheet. If you are familiar with Excel or other spreadsheet software, you might try using it to answer the following questions.

Exhibit 3.A Brant Freezer Warehouse Performance

	2016 Figures				2017 Figures
	Units Shipped		Warehouse Costs		Units Shipped		Warehouse Costs
	12 Months Jan.Dec.	5 Months through May 31	12 Months Jan.Dec.	5 Months through May 31	Projected 12 Months Jan.Dec.	Actual 5 Months May 31	Budgeted 12 Months Jan.Dec.	Actual Costs through May 31
Atlanta	17,431	4,080	156,830	35,890	18,000	4,035	178,000	40,228
Boston	6,920	3,061	63,417	27,915	7,200	3,119	73,000	29,416
Chicago	28,104	14,621	246,315	131,618	30,000	15,230	285,000	141,222
Denver	3,021	1,005a	28,019	8,600*	3,100	1,421	31,000	14,900
Fargo	2,016	980	16,411	8,883	2,000	804	17,000	9,605
Los Angeles	16,491	11,431	151,975	109,690	17,000	9,444	176,000	93,280
Portland	8,333	4,028	73,015	36,021	9,000	4,600	85,000	42,616
St. Louis	5,921	2,331	51,819	23,232	8,000	2,116	56,000	19,191
aDenver warehouse closed by strike March 419, 2016.

Figure 3.A Full Alternative Text

Exhibit 3.B Brant Freezer Company Income Statement

Income Statement 2016
Sales		$4,003,450
Cost of goods sold		$937,000
Gross Margin		$3,066,450
Transportation cost	$657,322
Warehousing cost	$735,982
Inventory carrying cost	$567,987
Other operating costs	$345,876
Total operating cost		$2,307,167
Earnings before interest and taxes		$759,283
Interest		$110,000
Taxes		$69,000
Net Income		$580,283

Figure 3.B Full Alternative Text

Exhibit 3.C Brant Freezer Company Balance Sheet

Balance Sheet 2016
Assets
Cash	$706,034
Accounts Receivable	$355,450
Inventory	$1,590,435
Total Current Assets	$2,651,919
Net Fixed Assets	$803,056
Total Assets	$3,454,975
Liabilities
Current Liabilities	$1,678,589
Long-term Debt	$398,060
Total Liabilities	$2,076,649
Shareholders Equity	$1,378,326
Total Liabilities and Equity	$3,454,975

Questions

When comparing performance during the first five months of 2017 with performance in 2016, which warehouse shows the most improvement?
When comparing performance during the first five months of 2017 with performance in 2016, which warehouse shows the poorest change in performance?
When comparisons are made among all eight warehouses, which one do you think does the best job for the Brant Company? What criteria did you use? Why?
J. Q. is aggressive and is going to recommend that his father cancel the contract with one of the warehouses and give that business to a competing warehouse in the same city. J. Q. feels that when word of this gets around, the other warehouses they use will shape up. Which of the seven should J. Q. recommend be dropped? Why?
The year 2017 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 2017. Do his work for him.
When comparing the 2016 figures with the 2017 figures shown in the table, the amount budgeted for each warehouse in 2017 was greater than actual 2016 costs. How much of the increase is caused by increased volume of business (units shipped) and how much by inflation?
Use the 2016 Income Statement and Balance Sheet to complete a Strategic Profit Model for J. Q.
Holding all other information constant, what would be the affect on ROA for 2017 if warehousing costs declined 10% from 2016 levels?

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