What circumstances cause local Haitian peanuts to be more expensive than those produced in foreign countries? Consider how operating leverage and economies of scale affect the cost per kilogram.
Krumwiede, K. R., Paik, G. H., & Walden, W. D. (2018). Can management accounting help aid associations make tough choices in Haiti? (Links to an external site.) Issues in Accounting Education, 33(1), 17–28.
Answer the following questions:
Susan Jackson recently accepted an unpaid intern, Anakin (Bongjoo) Kim, a recent accounting grad who wants to do humanitarian service before pursuing a career in international business. Susan is hoping that Anakin can use his management accounting knowledge to help HHC fulfill its mission. Specifically, she asked Anakin to address the following questions (these are the questions you are to answer in your submission):
- What circumstances cause local Haitian peanuts to be more expensive than those produced in foreign countries? Consider how operating leverage and economies of scale affect the cost per kilogram.
- How could cost-accounting information, such as break-even and target profit analysis, help Haitian farmers like Samuel Hilaire be more profitable? (Provide a minimum of three specific examples. If you cannot find the number you need, then make an assumption based on other case information.)
- Most, if not all, other aid associations buy their peanuts from lower cost, higher-quality providers, but there are good reasons for HHC to buy local peanuts even though they cost more. First, do a quantitative cost-benefit analysis of buying local peanuts rather than foreign peanuts. Next, identify other qualitative costs and benefits such as those affecting local farmers, the economic viability of the country, and HHC’s relationship with UNICEF.
- Think about HHC’s mission. What types of financial and nonfinancial information would help HHC lower its costs and still achieve its mission? How can cost accounting help HHC meet its objectives? Consider the appropriate costing system, key cost measures, and financial and nonfinancial impacts of using local peanuts.
- Many HHC donors not only want to help, but also want to know how their donations will make a difference. What kinds of financial and nonfinancial measures could HHC provide to donors to show how they are helping the people of Haiti? Consider how donations might be used, such as for new labor-saving equipment, supplementing HHC’s budget, expanding capacity, and who might benefit from the donations.
- What performance measures could HHC provide to UNICEF to help it achieve its goals and increase its purchases of RUTF made with local peanuts? Consider issues such as its mission, performance goals, food quality, and short-term versus long-term costs.
- What do you think is the best way to help the country and people of Haiti? Support your answer. Consider the macroeconomic, microeconomic, and ethical implications of your recommendation. For example, consider (1) how HHC could persuade UNICEF to think more long-term, (2) how HHC could expand its capacity to produce more Medika Mamba (MM), and (3) how to best reduce the amount of food aid provided to Haiti, and provide more nonfood aid.
- Your Word document should be 4 pages in length (not including the required cover and references pages).
- Answer each question in order. You can number them if you would like.
- Format your submission according to APA.
- You must include a minimum of six credible academic, or professional references beyond the course text, required and recommended readings, or other course materials.
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