Red Brand Canners

Q6: How much production fixed expenses should be allocated to 1 kg of "complete meal"? Give a specific number and your logic to support the

The factors we looked at were the yearly yield, the salvage value, and the wholesale unit cost. Through our sensitivity analysis, the profitability of our olive farm is most sensitive to changes in the yield of olives. Out of these three variables, maintenance costs have the least effect on our farm. If, for example, both maintenance costs and wholesale unit sales remain at their expected values, but our annual yield is cut in half, our IRR drops to 9.82% and our NPV is -$6,662.98. This is with a very conservative estimate of a 10% MARR. In this situation, the farm would just about break

|Price of Belgium cocoa beans|Quantity of Belgium cocoa beans |Quantity of Belgium cocoa beans |Total Demanded |

4. Calculate each of the three product’s break-even points using the data in Exhibit 3. Why is the sum of these three volumes not equal to the 1,100,000 units aggregate break-even volume?

Under an ABC system, the allocation of costs to products is achieved through at least four analytical steps. Firstly, costs are grouped into activity levels. Secondly, cost drivers are

After review of the independent costs, we found that each one produces a positive NPV, an IRR above the discount rate and a payback period within the required ten years. However, it is unrealistic to consider these on an independent basis. For our realistic case, we included overhead expenses and the excess cost of capacity for the agglomerator. We did not include the erosion of Jell-O sales and the test market expense, as this is a sunk cost. Under these circumstances we produced the following results:

In our excel model we tried to determine the no: of units/TEU at which the cost of the Option 2 (Zaragoza) is lower than cost of option 1 (Rotterdam) by varying the number of units/TEU (J 13 cell in excel model) and finding the influx point at which the cost difference becomes positive (E 69 cell in excel model).

Alternative 4 seems to be a very profitable course of action for The Mongolian Grill. Even under Mr Butkus’ low estimation of the increase in customers, the venture starts making money within six months of implementation. We made the assumption that the profit margin for the future restaurant will be the same as the existing restaurant. However, the profit margin is not set, and could change in the future. To allow for this, we conducted a sensitivity analysis to depict the influence of fluctuations in the restaurant’s profit margins of alternative 4.

Financial Analysis The sensitivity analysis on IRR provided by the case in Exhibit 9 is demonstrated in Table 3 in Appendix. With reference to the calculated WACC, 11.22%, most of the circumstances considered in the sensitivity analysis suggest the acceptance of the 7E7 project. However, if the air travel demand worsened and sold only 1500 in the first 20 years, the project will be abandoned even if there is a 5% premium in price. If the unit volume sold is equal to

Abby Conroy was tasked with calculating an effective quote for Breeland Ltd., she chose the activity based accounting costing system since it more accurately captures the related costs. A special order was placed by Breeland Ltd. with Ace Fertilizer Company. The did not plan to order more of this product in the future. Based on Ace’s policy, the special order included disposal costs for any used materials in the event no other orders existed for the unused materials at the time the Breeland contract was signed. Abby correctly calculated the total direct material and labor costs and accurately arrived at the indirect costs using the ABC method and used cost activity pools that make sense for the company and

Question 4: Calculate each of the three products’ break even points using the data. Why is the sum of these three volumes not equal to the 1,100,000 unit’s aggregate break-even volume?

This case analysis looks at the two primary problems at the receiving plant no. 1 (RP 1) faced by National Cranberry Cooperative during the cranberry harvesting period, viz. 1) too much waiting period for trucks before they unload berries at the RP1 and 2) too much overtime costs. There is also a secondary problem regarding grading of process berries. Half of the berries graded top quality are actually not top quality and do not deserve extra premiums paid on the top quality

Bill Cooper factored in allocated overhead costs for each line based on what we assume to be his production estimates. In his analysis, he determined that incremental profit was greatest on whole tomatoes ($0.60) and his production allocation is based off of this metric. Based on his analysis, the contribution to net profit per pound of tomato can be summarized as follows:

A balance between revenue and cost is seen at a target fill rate of 10.4 ounces per bottle. The revenue per case is greater when the bottles are filled to 10.5 ounces; however the resulting increase in the active ingredient cost produces a lower contribution per case. The recommendation is to use a target fill rate of 10.4 ounces per bottle. Initially there will be an increased cost of active ingredients but in the long

This method did not account for any specific cost arising from the complexity, diversity or other production related specifics of the product line. In contrary, the time-driven ABC approach does account for all the nuances of each product line. From the table can also be inferred that the practical capacity is not totally used since at the end there is a total of $28,288 of unused resources. Table 3 summarizes the capacity utilization of various resources.