ECON205 11/26/18 Capitalism Capitalism is a morally objectionable system that exploits workers and ignores the neediest global citizens. This is because it focuses on profits to the employers more than the well-being of the workers. Therefore, the wage rates of employees are very low in a capitalist setting. Comment by Microsoft Office User: You should combine this part with the second paragraph. And, bring out a clear thesis in the first paragraph. By definition, capitalism refers to an economic system whereby trade and industries in a certain country are controlled by specific individuals or private owners whose main aim is to make profits. The means of production are privately owned by either few individuals or the government. The property owners are responsible for making decisions, but prices are determined by the level of competition in a specific country (Myers, 2014). The benefits of capitalism are that it makes people work harder in order to earn a living and also enhances economic growth. Comment by Microsoft Office User: What relationship is between these two arguments. A clear thesis needed in the paragraph. Capitalism brings about unequal distribution of wealth since few individuals gain a lot of wealth while the majority of citizens remain very poor. People living in capitalist nations often become too materialistic. The system also increases the level of unemployment and brings about social alienation (Slaughter et al, 2017). Those who have managed to acquire wealth often segregate those who are poor. The working conditions of employees in a capitalist nation are often very poor since focus is only on profits. Comment by Microsoft Office User: You can expand more and provide more examples about how people are alienated by capitalism. The prompt which I find personally compelling is that capitalism leads to the development of a nation. This is because individuals work harder in order to achieve greater things such as having more economic power. As mentioned earlier, capitalism enhances economic growth of a country. However, capitalism may lead to war due to the stiff competition for resources and markets among the few individuals who own the companies (Tienhaara, 2014). Comment by Microsoft Office User: You should use the quotations from the textbook to prove that capitalism can actually make a society wealthier. Capitalism can also be compared to slavery since it does not take into account the well-being of employees. Trade unions in a capitalist setting are more than in a communist setting since the wages of workers and working conditions are normally less considered (Tienhaara, 2014). Capitalism focuses more on making profits and wealth creation for few individuals. Comment by Microsoft Office User: Good start of a paragraph, but you just need to fill more information into this section. Although it is okay to focus on profits and wealth creation, it is also good to consider the well-being of workers and the needs of citizens.

1. ECON205
11/26/18
Capitalism
Capitalism is a morally objectionable system that exploits
workers and ignores the neediest global citizens. This is
because it focuses on profits to the employers more than the
well-being of the workers. Therefore, the wage rates of
employees are very low in a capitalist setting. Comment by
Microsoft Office User: You should combine this part with the
second paragraph. And, bring out a clear thesis in the first
paragraph.
By definition, capitalism refers to an economic system whereby
trade and industries in a certain country are controlled by
specific individuals or private owners whose main aim is to
make profits. The means of production are privately owned by
either few individuals or the government. The property owners
are responsible for making decisions, but prices are determined
by the level of competition in a specific country (Myers, 2014).
The benefits of capitalism are that it makes people work harder
in order to earn a living and also enhances economic growth.
Comment by Microsoft Office User: What relationship is
between these two arguments. A clear thesis needed in the
paragraph.
Capitalism brings about unequal distribution of wealth since
few individuals gain a lot of wealth while the majority of
citizens remain very poor. People living in capitalist nations
often become too materialistic. The system also increases the
level of unemployment and brings about social alienation
(Slaughter et al, 2017). Those who have managed to acquire
wealth often segregate those who are poor. The working
conditions of employees in a capitalist nation are often very
poor since focus is only on profits. Comment by Microsoft
Office User: You can expand more and provide more examples
about how people are alienated by capitalism.

2. The prompt which I find personally compelling is that
capitalism leads to the development of a nation. This is because
individuals work harder in order to achieve greater things such
as having more economic power. As mentioned earlier,
capitalism enhances economic growth of a country. However,
capitalism may lead to war due to the stiff competition for
resources and markets among the few individuals who own the
companies (Tienhaara, 2014). Comment by Microsoft Office
User: You should use the quotations from the textbook to prove
that capitalism can actually make a society wealthier.
Capitalism can also be compared to slavery since it does not
take into account the well-being of employees. Trade unions in
a capitalist setting are more than in a communist setting since
the wages of workers and working conditions are normally less
considered (Tienhaara, 2014). Capitalism focuses more on
making profits and wealth creation for few individuals.
Comment by Microsoft Office User: Good start of a
paragraph, but you just need to fill more information into this
section.
Although it is okay to focus on profits and wealth creation, it is
also good to consider the well-being of workers and the needs
of citizens. Capitalism would be the best system if it also
focused on the conditions of workers. Comment by Microsoft
Office User: Don’t forget indenting at the beginning of every
paragraph.

3. REFERENCES
Myers (2014). The capital structure puzzle. The journal of
finance, 39(3), 574-592.
Slaughter et al (2017). Academic capitalism: Politics, policies,
and the entrepreneurial university. The Johns Hopkins
University Press, 2715 North Charles Street, Baltimore, MD
21218-4319.
Tienhaara (2014). Varieties of green capitalism: economy and
environment in the wake of the global financial
crisis. Environmental Politics, 23(2), 187-204.
Dallas Co. has three product lines, A, B, and C. The following
financial information is available for this year:
Product A
Product B
Product C
Sales revenue
75,000
60,000
50,000
Total variable costs
50,000
35,000
40,000
Contribution Margin
Fixed costs

4. Avoidable
12,000
10,000
8,000
Unavoidable
10,000
8,000
5,000
Operating Income
Required:
a) Total operating income of the company is:
b) Assuming the company drops Product Line C because it
generates a loss without replacing it, operating income for the
firm will:
c) Product Line C is discontinued and the manufacturing space
formerly devoted to this line is used to expand the sales of
Product Line A by 20%. Assuming that both the variable costs
and avoidable fixed costs were increased by 30%, operating
income for the company will:
d) Assuming that Product Line C is discontinued and the
manufacturing space formerly devoted to this line is rented for
$6,000 per year, operating income for the company will:
Dallas Kitchen replaced the convection oven two years ago.
Today, the company found that a new convection oven that
cooks more quickly with lower operating expenses was aailable.
The company is considering the purchase of this faster, lower-
operating cost convection oven to replace the existing one they
recently purchased.
Selected information about the two ovens is given below:

5. Current Oven
New Oven
Original cost
$80,000
$70,000
Accumulated depreciation
$32,000
?
Current salvage value
$40,000
?
Remaining life
5 years
5 years
Annual operating expenses
$25,000
$20,000
Disposal vale in 5 years
$0
$0
Required:
a. What costs are sunk?
b. What costs are relevant?
c. What are the net cash flows over the next 5 years assuming
the company purchases the new convection oven?
d. What other items should the company consider when making
this decision?
In an effort to improve its competitive position, Dallas Co.
recently introduced a new inventory control system. Its
management accountant assembled the following data regarding
the recent change:

6. Item
Before new system
After new system
Production cycle time
50 days
40 days
Inventory level
$200,000
$120,000
Total sales
$1,800,000
$2,000,000
Estimated cost data, % of sales
Direct materials
35%
30%
Direct labor
20%
15%
Variable overhead
15%
10%
Fixed overhead
10%
5%
The company's inventory financing cost is estimated as 10% per
year.
Required:
1. Estimate the net financial benefit (expressed in terms of
operating income) that the company realized from the switch to
a new inventory control system.
2. List four (4) non-financial benefits the company might expect
as a result to its move to new inventory control system.

7. 3. What are the primary expected costs of implementing a new
inventory control system?