The Collapse of Farmland Values and Commodity Prices in 1980's
The collapse of farmland values and commodity prices in the 1980s led
to the worst agriculture crisis since Great Depression, which
discourage farmers to buy new equipment, instead many of them willing
to resale the equipment they bought not long time ago to finance their
land, thus, greatly reduced the dominate market, moreover, the higher
dollar exchange rate in 1980s hurt the US exports, both in farmers,
which are the main customer of John Deere and farm equipment producer,
such as John Deere. Therefore, the competitive environment became more
challengeable for the John Deere Component Works (JDCW) between the
1970s and the 1980s.
2. What caused the system to fail in the 1980s? What are the symptoms
of cost system failure?
The system assigns overheads only based on “normal volume, which
usually are labor and materials. This lead to distortions cost in the
calculation of products cost, and many indirect and support cost,
which are not used by products in normal volumes base, are included.
Therefore, the system provided inaccurate information, as Sinclair
recalled: “we didn’t even know our costs.”
The symptoms are disaster. JDCW lose both Internal and External
market.
Decrease the gap b/t outside bid.
3. What promise does the ABC system hold? How might it overcome these
problems?
The ABC system divides the overheads resources by seven different
types instead of two: direct labor support, machine operation, set up
hours, production order activity and administrative overhead...
... middle of paper ...
...rs OH = 27.56 x .310 = 8.54
Materials Dollars OH = .097 x 6.44 = 0.62
Total Cost (per 100
parts)
$22.85
ABC METHOD
Total Cost = Direct Labor + Direct Materials + Overhead
Direct Labor = .185 x 12.76 = 2.36
Direct Materials = 6.44
Overhead:
Labor Support OH = 1.11 x .185 x 12.76 =
2.62
Machine Operation OH = (8.99 + 7.61) x .310 = 5.15
Machine Setup OH = (33.76 x 4.2 x 2) / 80 = 3.54
Production Order OH = (114.27 x 2) / 80 = 2.86
Materials Handling OH = (19.42 x 4) / 80 = 0.97
Parts Admin. = (487 x 1) / 80 = 6.09
General and Admin. = (.091 x 12.76 x.185) + 23.59 = 2.38
Total Cost (per 100
parts)
$32.83
Through the period of 1865-1900, America’s agriculture underwent a series of changes .Changes that were a product of influential role that technology, government policy and economic conditions played. To extend on this idea, changes included the increase on exported goods, do the availability of products as well as the improved traveling system of rail roads. In the primate stages of these developing changes, farmers were able to benefit from the product, yet as time passed by, dissatisfaction grew within them. They no longer benefited from the changes (economy went bad), and therefore they no longer supported railroads. Moreover they were discontented with the approach that the government had taken towards the situation.
The young, recently married farmers living in the Great Plains during the 1930s had a terrible life. First off, being married meant having multiple people to provide for. This is more responsibility, and leads to dividing up the food between family members. Then, the country was also in an economic downturn, so the price of food and crops were low. Farmers already had debt because of new machines and land that was purchased during World War I to keep up with the demand during the war. Then the depression caused banks to fail, so farmers lost all their money that was in the bank. Everyday life was treacherous, and there were few amenities in the home, with no plumbing or electricity. Life was awful for a farmer during the Great Depression.
Farmers everywhere in the United States during the late nineteenth century had valid reasons to complaint against the economy because the farmers were constantly being taken advantage of by the railroad companies and banks. All farmers faced similar problems and for one thing, farmers were starting to become a minority within the American society. In the late nineteenth century, industrialization was in the spotlight creating big businesses and capitals. The success of industrialization put agriculture and farmers on the down low, allowing the corporations to overtake the farmers. Since the government itself; such as the Republican Party was also pro-business during this time, they could have cared less about the farmers.
Hard Times’ ‘The Dirty 30s’ ‘The Great Depression’ (Ganzel n. pag.)This quote describes so much about 1930’s especially farming. Farming was hard because there was a really bad drought. Was out they rain no crops could grow. And the crops can't hold the soil together and not blow away. Which was really bad for the soil to blow away. Also the farmers didn't know that the equipment they were using would tear up the soil too much and it would blow away. The farming in the 1930s was bad because of the dust bowl and the price of everything was low.
The Plight of the Late Nineteenth Century American Farmer From the early beginnings of America to well into the nineteenth century, America has been dominantly an agricultural country. Farming and the country life have always been a great part of the American culture. Thomas Jefferson even expressed his gratitude for the farming class by saying Those who labor on the earth are the chosen people of God, if ever He had a chosen people, whose breasts He, has made His peculiar deposit for substantial and genuine virtue. The American culture was built upon farming and agriculture, but since the end of the Civil War and the abolition of slaves, things have changed dramatically to the American lifestyle. This time brought on the Industrial Revolution, which sparked many factories and new ways of transportation across America.
John Deere Component Works (JDCW), subdivision of John Deere and Co. was in charged specifically of the manufacturing of tractor component parts. The demand for JDCW’s products had problems due to the collapse of farmland value and commodity prices. Numerous and constant failures in JDCW’s competition for bids, alerted top management to start questioning their current costing methods. As an outcome, the analysis has to be guided to research on the current costing methods with the intention of establishing legitimacy and to help the company in adopting a more appropriate costing system.
The country at the time was in the deepest and soon to be longest-lasting economic downturn in the history of the Western industrialized world and this caused years of over-cultivation of wheat, because “during the laissez-faire, expansionist 1920’s the plains were extensively and put to wheat - turned into highly mechanized factory farms that produced highly unprecedented harvests” (Worster 12). ¬The farmer’s actions were prompted by the economic decline America was facing. With the economy in a recession, farmers were looking for a way to make a living and in 1930 wheat crop were becoming very popular. In 1931 the wheat crop was considered a bumper crop with over twelve million bushels of wheat. Wheat was emerging all over the plains. The wheat supply forced the price down from sixty-eight cents/bushel in July 1930 to twenty-five cents/bushel in July 1931. Many farmers went broke and others abandoned their fields, but most decided to stay despite the unfavorable
The farmers of the Great Depression did benefit from “New Deal”. The New Deal was mainly focused one them and the government tried many ways and started many organizations to help them from being taken advantage of like they had been in previous years.
The 1920’s were the singularly most influential years of farming in our country. The loss of farms following the war, and new agricultural practices resulted in the dawn of modern agriculture in our country. The shift from small family to big corporation during this time is now the basis for how our society deals with food today. Traditional farming in the 1920’s underwent a series of massive transitions following WWI as the number of farms decreased and the size of farms increased.
From the expanding of railroads country wide, to limiting laws on the goods farmers sold and transportation of the goods,to starvation of the economy, agriculture began to take its own shape from 1865 through to 1900 in the United States.
The time period between 1880’s and 1900’s was generally good for politics. The U.S did not face the threat of war and many of the citizens were living peacefully. However, as time went by, the farmers in America found that life was becoming very rough for them. The crops they planted such as, wheat, cotton, etc. were once the sustenance of the agriculture industry, but now they were selling at such a low price that it was hard for farmers to make a profit. Rather many of the farmers were falling deep into debt. Furthermore, the improvement in transportation helped the foreign market gain an upper hand. Farmers often had to pay rebates and drawbacks to railroad companies to ship their goods. Railroad companies used rebates to win over the large business owners and made up the loss in profit by charging smaller shippers way more. During the last twenty years of the nineteenth century, farmers considered monopolies, trusts, railroad, and loss in silver backed dollar as threats to their agrarian lifestyle. Overall, the farmers blamed their problems on two things; the money supply, and the railroads which were valid complaints.
Have you ever felt the need to give up? Pressured with difficult issues, later to find you made the wrong turn losing everything? What normally separates the successful from the hopeless, is their ability to maneuver through tough times, and if made wrong decisions correct them for a later day. Henry Ford once said “ Failure is only the opportunity to begin again, only this time more wisely”. After the First World War, many countries were left with an immense amount of debt load. Not many jobs were being produced for veterans and cities were war struck. Nations and the world at large, was in a catastrophic mess. Chances of things looking like before the War were slim. By the 1920’s, all views of negativity had changed. Canada’s economy seemed
I think they should open up poor farms, or community farms, like they had back in the late 1800’s and early 1900’s. If the states or counties in the united states would open one per two or three counties the homelessness would go away completely or it would cut it down almost to nothing. Poor farms are like community homes where homeless people can go to live but they would have to work on the farm to earn a living. They should make it so when a family or an individual comes into the farms they will have to sign a contract for how many years or months they will have to live there. They can’t leave until their contract is up and they will be set up with a job when they leave the farms. “Time was that Marin County cared for its homeless population
“My parents were children during the Great Depression of the 1930’s and it scarred them. Especially my father, who saw destitution in his Brooklyn, New York neighborhood; adults standing in so called “bread lines”; children begging in the streets.” - (Bill O'reilly) The Great Depression was one of the most difficult times in U.S. history. Men, women, and even children had suffered through it and would be forever scarred. The Great Depression had started in 1929, when the stock markets had crashed. Many families had lost their jobs, lost their money, lost their home, barely had any food, and had to be useful of their resources. These were very depressing times and everyone had to suffer for 10 long years.
If I lived in 1880, I would choose to be a farmer because of the Homestead Act of 1862, which allowed acres of land for any American citizens over 21. The Homestead Act provided many potential farmers with new land and a chance to make a living for themselves. African Americans also took advantage of this opportunity and moved their whole families along with them.