competitive pharmaceutical industry, the challenges confronting Biovail are intensifying as regulatory agencies release formal allegations of misconduct against four corporate executives and as outstanding lawsuits, widespread scrutiny, and a history of questionable accounting practices are unavoidably coming to a head. Responsible for overcoming its damaged reputation and for moving the company forward, it is imperative that management at Biovail resolve three immediate issues. 1. Establishing a
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UNIVERSITI UTARA MALAYSIA COLLEGE OF BUSINESS FIRST SEMESTER SESSION 2013/2014 BKAL3063 INTEGRATED CASE STUDY GROUP F (2) CASE 3: BIOVAIL CORPORATION - REVENUE RECOGNITION AND FOB SALES ACCOUNTING PREPARED FOR: AMIN BIN ALI PREPARED BY: GAN PEI WEN 205401 SARA LEE HWEI MEI 206998 THEH JIA HUI 207133 JUMAIAH BINTI YASIN 207827 AISHA ANUAR 207919 DATE OF SUBMISSION: 21st OCTOBER 2013 TABLE OF CONTENTS INTRODUCTION 1 ISSUES 1 QUANTITATIVE ANALYSIS 2 QUESTION
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Biovail Business Memo Based on the assumptions provided in the case literature, each tractor trailer contains volume of 191.25 mᶾ, or 191,250,000 cmᶾ. Assuming that each tablet takes up 1.5 cmᶾ of space and has a wholesale price of $2.83 per tablet, each trailer can carry up to $360,825,000 worth of Wellbutrin XL product. $10,000,000 worth of product would take up 0.03 trailers, or 3% of a trailer’s total volume. The company’s stated accounting treatment of their product shipments is FOB shipping
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Biovail Corporation Issues : 1) The company has the problem with their recognition of the profit * Whether they should realize or not the revenue for the third quarter. 2) Issues on the concepts of revenue recognition that have been apply in the company to show their financial results. * Whether Biovail Corporation recognize its revenue using FOB shipping point or FOB destination. Suggested Solution 1) FOB Destination shipping term * The truck accident had no impact on
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should the company recognize revenue based upon the two possible FOB structures mentioned in the contract? Option 1: FOB shipping point: Recognise revenue when shipment leaves Manitoba, provided that Biovail does not retain any significant risks of ownership or future obligations. Biovail recognized revenue when the product was shipped to the customer provided that it has not retained any risk of ownership or future obligations when the product has been shipped to the customer. The revenue
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UNITED STATES DISTRICT COURT -SOUTHERNDISTRICT OF NEW YORK SECURITIES AND EXCHANGE COMMISSION, Plaintiff, 08 Civ. ECF CASE BIOVAIL CORPORATION, EUGENE N. MELNYK, BRIAN CROMBIE, JOHN MISZUK, and KENNETH G. HOWLING, Defendants. COMPLAINT Plaintiff Securities and Exchange Commission, for its Complaint against Defendants Biovail Corporation ("Biovail" or the "Company"), Eugene N. Melnyk, Brian Crombie, John Miszuk and Kenneth G. Howling (collectively, "Defendants"), alleges as
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Biovail Corporation Issues : 1) The company has the problem with their recognition of the profit * Whether they should realize or not the revenue for the third quarter. 2) Issues on the concepts of revenue recognition that have been apply in the company to show their financial results. * Whether Biovail Corporation recognize its revenue using FOB shipping point or FOB destination. Suggested Solution 1) FOB Destination shipping term * The truck accident had no impact on
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1. a) What is the manufacturer revenue per pill? (Please see attached calculation file) Biovail Distributor Wholesaler Retailer Retailer Wholesaler Distributor Cost = $2.83 Margin = (Price – Cost)/Price Margin = 0.35, Price = $2.83 Cost = Price(1 – Margin) Cost = $1.84 Markup = (Price – Cost)/Cost Markup = 4, Prices = $.184 Cost = Price/(1 + Markup) Cost = (1.84)/5 = $0.37 Biovail = $0.3679 revenue per pill = $0.37 revenue per pill (rounded) • How many pills equate to
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Biovail Case Assignment Questions: 1. How many truckloads of product are actually required to carry $10 million of product? Show your calculations. Given: a. 1 Wellbutrin XL tablet is estimated to be 1.5 cm3 (this includes the packing space) b. 1 18-wheeler trailer’s dimensions are: 17m x 4.5m x 2.5m Since the tablet and the trailer are using different units of measurements we need to convert the trailer dimensions to centimeters before we can calculate the volumes. a. To convert
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Biovail Case Part 1: Assumptions: 1. The mark-up is from the Distributor to the Wholesaler, and the margin is from the Wholesaler to the Retailer Biovail Distributor purchase price Wholesaler purchase price = Distributor purchase price + 400% mark-up Retailer price = Wholesaler price + 35% margin 2. We don’t know the excess space needed in the truck for the 64 gallon drums so we assumed that the 1.00 cm3 accounts for the excess space
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