1 Problem 1. (25 points) An equipment proposal from two vendors A1 and A2 have been...
Problem 1. (25 points) An equipment proposal from two vendors A1 and A2 have been receixed from a local company. The quality of these equipment have been varying and consequently the cost of manufacturing the product using these two different equipment has also varied. The varying costs based on the probabilities of defects are given in table below. Determine the expected manufacturing cost for each vendor and select the better vendor. Vendor A1 0.15 0.20 0.10 0.05 0.50 $20 25...
ABC company intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed cost for proposal A are $10,000, and for proposal B, $8,000. The variable cost for A is $10.00, and for B, $7.00. The revenue generated by each unit is $20.00. You definitely will pick up a machine which will produce the larger profit. If 2000 units will be sold, what will the profit in dollars be generated assuming...
Problem 4-5A Pricing analysis with ABC and a plantwide overhead rate LO A1, A2, P1, P3 The following information applies to the questions displayed below) Sara's Salsa Company produces its condiments in two types: Extra Fine for restaurant customers and Family Style for home use. Salsa is prepared in department 1 and packaged in department 2. The activities, overhead costs, and drivers associated with these two manufacturing processes and the company's production support activities follow. Process Department 1 Activity Mixing...
Problem 1 (25 points) A manufacturing firm must choose between two mutually exclusive pieces of equipment for one of its production lines. The company uses an effective tax rate of 34% and an after-tax MARR of 10%. Which option should they select on an after-tax basis? Option 1 Option 2 Initial Cost $100,000 $300,000 Annual Net Revenues $40,000 $100,000 Salvage Value $25,000 $75,000 Depreciation Method MACRS Depreciable life 3 - year GDS Useful life 4 years CFAT EOY Tax CFBT...
Problem 4. A section of a two-lane highway has 12-ft lanes and a design speed of 75 mi/h. The section contains a vertical curve and a horizontal curve. The vertical curve connects a-2.5% grade and a +1.5% grade. The PVT of this vertical curve is at station 36 + 50. The PC of the horizontal curve is located 294 ft before the PVC of the vertical curve. The horizontal curve has superelevation of 8% and central angle of 38 degrees....
SANTOS Award: 2.50 points McNulty, Inc., produces desks and chairs. A new CFO has just been hired and announces a new policy that if a product cannot eam a margin of at least 25 percent, it will be dropped. The margin is computed as product gross profit divided by reported product cost. Manufacturing overhead for year 1 totaled $944,000. Overhead is allocated to products based on direct labor cost. Data for year 1 show the following Sales revenue Direct materials...
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Expand Your Critical Thinking 20-02 a2, b-c (Essay) MiniTek manufactures private-label small electronic products, such as alarm clocks, calculators, kitchen timers, stopwatches, and automatic pencil sharpeners. Some of the products are sold as sets, and others are sold individually, Products are studied as to their sales potential, and then cost estimates are made. The Engineering Department develops production plans, and then production begins. The company has generally had very successful product introductions. Only two...
Elroy had been with Barnes Machine Company a year since finishing a BS in industrial engineering (IE). Barnes had been in business for over 50 years, but the company had only recently moved from Detroit to Gainesville, Georgia. The public reason for the move was the economics of the old facility. Privately, based on comments he had heard, Elroy believed a shift to nonunion labor was a larger motive. Elroy’s boss is the production supervisor, Mr. Hill. Because the plant...
1 (10 points). John Milton and two of his colleagues are considering opening a law office in New York City that would make inexpensive legal services available to those who could not otherwise afford these services. The intent is to provide easy access for their clients by having the office open 360 days per year, 16 hours each day from 7:00 a.m. to 11:00 p.m. The office would be staffed by a lawyer, paralegal, legal secretary, and clerk-receptionist for each...
"Two dollars of gross margin per briefcase? That's ridiculous!" roared Roy Thurmond, president of First-Line Cases, Inc. "Why do we go on producing those standard briefcases when we’re able to make over $12 per unit on our specialty items? Maybe it’s time to get out of the standard line and focus the whole plant on specialty work." Mr. Thurmond was referring to a summary of unit costs and revenues that he had just received from the company’s accounting department: StandardBriefcasesSpecialtyBriefcasesSelling price per...