INTERNATIONAL OPERATIONS The International operations of FPI contributed a lot to the over-all gross margin of the company counting

almost 36% in its first year of operations in 2001. In the United States, it has profitably performed and thus, extending their services to the nearby countries including European countries. Mr. Francis de Vera, the international head of Fraser Pawnshop Incorporated was much saluted for a job well done. Now, the company is placing more trust and confidence for a continuous success of their international operations. However, Mr. de Vera could feel some sort of anticipation and anxiousness, though he had complied with the various policies and regulations of different political bodies of each countries, much of his concern was put for the comparative 3-year Net Income of the companys international operations. 2009 Sales Variable Costs Direct Fixed Costs Indirect fixed Costs
PROFIT BEFORE TAX $

2010 $ 4, 616, 080 2, 054, 472 1, 475, 881 188, 300 $ 897, 427 $

2011 $ 4, 722, 060 2, 082, 302 1, 480, 881 188, 300 970, 577

$ 3, 405, 600 1, 362, 240 975, 881 102, 300 956, 179

They had exploited the European market at the beginning of 2009, however the responsible accountant failed to include the initial results of Europe operations and the record shows that the U.S sales continue to grow 5% annually, and the direct fixed costs is expected to increase in any circumstances. The company maintains a regular U.S dollar accounts in all its international operations. Mr. Francis de Vera wants to know if the operation is going well as expected since it seems that the industry is not totally accepted by the European public.

2|Page

BRANCH MANAGER OFFER One of the competing competencies of FPI is that all its branches location are strategically planned so as to be the most accessible to their valued customers as compared to others. Mr.Yasuf Sullah, the Branch Manager of their only one Sulu branch, received an offer from a competitor to have a double pay if he will resign from the company and transfer to the latter, since it is very difficult to obtain community patronage from the area. Mr. Sullah is a well-known citizen of Sulu as being a former Barangay Chairman for 3 consecutive terms. As disclosed by Mr.Yasuf Sullah, he is asking an increase in his remuneration for the same amount offered by the competitor. His current salary is P22, 000 and is considered enough by the company because of the low cost of living in Sulu. Operating income last year of the branch was P40, 000 excluding the Branch Managers Salary. It is projected that if the Branch Manager is replaced, income will decrease approximately by P4, 000.

3|Page