1. Construct a spreadsheet model to analyze this situation. Use an order quantity of 70,000 and a demand of 62,000 for your base case values. Be sure to explain what assumptions you made while constructing your model
Q: gress, Inc., is a small company that designs, produces, and sells ski jackets and other coats. The…
A: 1. Assuming that the demand is distributed normally, using the twelve random values for demand…
Q: purchase price. It costs the Book Shop $500 to place a single order. The maximum sale for the Book…
A:
Q: Black Diamond Company produces snow skis. Each ski requires 2 pounds of carbon fiber. The company's…
A: Production Budget (In Units)Third Quarter Budgeted sales 150,000 Add: Desired ending inventory…
Q: The following information applies to the questions displayed below.] Shadee Corp. expects to sell…
A: Answer 1
Q: The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is…
A: We will have to reverse our calculation to arrive at target profit Target profit = $ 1,320 Sales…
Q: Specialty Toys, Inc., sells a variety of new and innovative children’s toys. Management learned that…
A: Given: Probability the order quantity will meet the demand = 0.70 Probability the order quantity…
Q: JVA store serves an approximate 1,200 customers annually. These are the breakdown of its customers:…
A: Annual market size refers to the amount of total revenue generated by an entity in the market. It is…
Q: Over the winter months, Sheridan Lawns Co. pre-sells fertilizing and weed control lawn services to…
A: It is given that lawn services are to be performed May through September. As per accrual concept ,…
Q: Black Diamond Company produces snow skis. Each ski requires 2 pounds of carbon fiber. The company's…
A: Direct labor budget is used to estimate the direct labor hours required and direct labor cost for a…
Q: Megatron Barber provides a standardised hair design and care service to customers. The price for…
A: The comparison Factors between Feb, 2020 (Promotional Plan) and Feb, 2021 (Non-Promotional Plan)…
Q: Clarks Inc., a shoe retailer, sells boots in different styles. In early November the company starts…
A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…
Q: Black Diamond Company produces snow skis. Each ski requires 2 pounds of carbon fiber. The company's…
A: Budgeted sales 150,000 Add: Desired ending inventory 3,500 Required units of available…
Q: Aria Perfume, Inc., sold 3,210 boxes of white musk soap during January of 2018 at the price of $90…
A: Given information is: Aria Perfume, Inc., sold 3,210 boxes of white musk soap during January of 2018…
Q: Hard Drives Inc. manufactures computer hard drives. Because demand has seasonal variations it is…
A: Cost management: Cost management can be defined as the process of estimating, controlling and…
Q: Black Diamond Company produces snow skis. Each ski requires 2 pounds of carbon fiber. The company’s…
A: Units to be manufactured : = Budgeted ending inventory + budgeted units sales for quarter - budgeted…
Q: Every summer Marianna offers a special convertible roof on the Sport Coupe model. The demand for the…
A: Suppose She Ordered the 2200 roof Every Year and as Per Question no Inventory left out as she sold…
Q: Wall’s Pharmacy will have to sell a new product that has an estimated revenue of $5,100 per month…
A: We have to find out net income per month and than find out number of months required to recover…
Q: The Ralston Company manufactures a special line of graphic tubing items. The company estimates it…
A: Answer: Option B is the correct Answer i.e. 75,000
Q: Over the winter months, Carla Vista Lawns Co. pre-sells fertilizing and weed control lawn services…
A: We know that as per accrual basis of accounting transactions are recorded as and when they occur.…
Q: Black Diamond Company produces snow skis. Each ski requires 2 pounds of carbon fiber. The company's…
A: Units to be manufactured = Budgeted sales + Desired ending inventory - Beginning inventory
Q: In March, Swim and Sport purchased designer bathing suits for $50 each. The original markup was 60%…
A: The price of a product can be mark down or mark up in order to affect the demand and profitability…
Q: Berry Farm produces organic tomatoes and strawberries. In June 2021, it transported 115 boxes of…
A: As per IAS 115,Revenue Recognition, 5th condition for Revenue recognization is to recognize…
Q: Meijer stores carries a specialty line of flavored syrups. One of the most popular of these is…
A:
Q: The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is…
A:
Q: Black Diamond Company produces snow skis. Each ski requires 2 pound of carbon fiber. The company’s…
A: HI Student Since there are multiple subparts, we will answer only first three subparts. If you want…
Q: 8 per order. Orders are placed on an “as required” basis and the coffee bar occasionally runs…
A: Economic order quantity is the most cost efficient quantity that should be ordered.
Q: The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is…
A: Contribution per unit=Sale-Cost of sweatshirt-Commission=$40-$20-$7=$13
Q: Black Diamond Company produces snow skis. Each ski requires 2 pounds of carbon fiber. The company’s…
A:
Q: The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is…
A:
Q: The following information applies to the questions displayed below.] Shadee Corp. expects to sell…
A: First, compute the budgeted production in units as shown below:
Q: Shadee Corp. expects to sell 550 sun visors in May and 450 in June. Each visor sells for $26.…
A: 1. Details Amount Direct Material $3.50 Direct Labour (0.60 x $10) $6 Variable…
Q: ClipClop record in connection with the April sale? $7,680 $20,000 $0 because ClipClop does not know…
A: As per relevant standard if the entity believes that it is probable that a discount will be provided…
Q: Clarks Inc., a shoe retailer, sells boots in different styles. In early November the company starts…
A: Journal entry refers to the systematic documentation of the financial transactions of a company in…
Q: A local distributor for a national tire company expects to sell approximately 9,600 steel-belted…
A: Economic order quantity refers to the optimal amount of inventory a company should purchase in order…
Q: Hoffman Industries manufactures a popular interactive stuffed animal for children that requires two…
A: Direct material budget shows the amount of raw material required during each month.
Q: Black Diamond Company produces snow skis. Each ski requires 3 pounds of carbon fiber. The company’s…
A: Direct materials budget indicates the how much company needs to brought the materials from…
Q: Black Diamond Company produces snow skis. Each ski requires 3 pounds of carbon fiber. The company’s…
A: The budget is prepared to estimate the production requirements in advance.
Q: Black Diamond Company produces snow skis. Each ski requires 3 pounds of carbon fiber. The company’s…
A: A direct labor budget indicates the number of direct labor hours needed for budgeted production as…
Q: The following information applies to the questions displayed below.] Shadee Corp. expects to sell…
A: First compute the budgeted production in units:
Q: Cash & Credit Supermarket Inc. currently asks its credit customers to pay by the end of the month…
A: Net cost/benefit Analysis: It analyses the benefits of a decision and the costs associated with the…
Q: [The following information applies to the questions displayed below.] Shadee Corp. expects to sell…
A: The budgeted selling and administrative expense refer to the expense estimated to be incurred on…
Q: [The following information applies to the questions displayed below.] Shadee Corp. expects to sell…
A: The following calculations are done in the records of Shadee Corporation to show the budgeting for…
Q: Ada is running a store to sell soft-drink and snacks. For one soft-drink, given the daily demand is…
A: Basic Information The question is related to the Inventory Management. In this question first we…
Q: Could use some assistantance on solving this problem, thank you
A: According to our guidelines we provide solution of only first 3 sub part. if you want the solution…
Q: What level of unit sales and dollar sales is needed to attain a target profit of $9,000? 2. Assume…
A:
Q: A recognized pharmaceutical company buys and sells a dangerous chemical. This substance is purchased…
A: Cost of shortage = Cost incurred everytime the company runs out of stock. This is the difference in…
Each year in May, P.A.M. Cosmetics (Professional Artistry Makeup) launches a selection of limited edition lipsticks. To ensure these lipsticks are in stock in time for the launch, orders must be placed with manufacturers in November. Because these lipsticks are limited edition and require 6 months of lead-time, P.A.M. Cosmetics will not reorder more units if they completely sell out. It costs P.A.M. Cosmetics $5.30 to produce each lipstick, and the selling price is $16. In the event that there are leftover units after the launch period (1 month), there will be a price markdown of 40 percent. In the past, demand for these yearly limited edition lipsticks has been 58,000 units. However, P.A.M. Cosmetics has initiated several social media campaigns to create more hype for new products.
1. Construct a spreadsheet model to analyze this situation. Use an order quantity of 70,000 and a demand of 62,000 for your base case values. Be sure to explain what assumptions you made while constructing your model.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- NoFat manufactures one product, olestra, and sells it to large potato chip manufacturers as the key ingredient in nonfat snack foods, including Ruffles, Lays, Doritos, and Tostitos brand products. For each of the past 3 years, sales of olestra have been far less than the expected annual volume of 125,000 pounds. Therefore, the company has ended each year with significant unused capacity. Due to a short shelf life, NoFat must sell every pound of olestra that it produces each year. As a result, NoFats controller, Allyson Ashley, has decided to seek out potential special sales offers from other companies. One company, Patterson Union (PU)a toxic waste cleanup companyoffered to buy 10,000 pounds of olestra from NoFat during December for a price of 2.20 per pound. PU discovered through its research that olestra has proven to be very effective in cleaning up toxic waste locations designated as Superfund Sites by the U.S. Environmental Protection Agency. Allyson was excited, noting that This is another way to use our expensive olestra plant! The annual costs incurred by NoFat to produce and sell 100,000 pounds of olestra are as follows: In addition, Allyson met with several of NoFats key production managers and discovered the following information: The special order could be produced without incurring any additional marketing or customer service costs. NoFat owns the aging plant facility that it uses to manufacture olestra. NoFat incurs costs to set up and clean its machines for each production run, or batch, of olestra that it produces. The total setup costs shown in the previous table represent the production of 20 batches during the year. NoFat leases its plant machinery. The lease agreement is negotiated and signed on the first day of each year. NoFat currently leases enough machinery to produce 125,000 pounds of olestra. PU requires that an independent quality team inspects any facility from which it makes purchases. The terms of the special sales offer would require NoFat to bear the 1,000 cost of the inspection team. Based solely on financial factors, explain why NoFat should accept or reject PUs special sales offer.NoFat manufactures one product, olestra, and sells it to large potato chip manufacturers as the key ingredient in nonfat snack foods, including Ruffles, Lays, Doritos, and Tostitos brand products. For each of the past 3 years, sales of olestra have been far less than the expected annual volume of 125,000 pounds. Therefore, the company has ended each year with significant unused capacity. Due to a short shelf life, NoFat must sell every pound of olestra that it produces each year. As a result, NoFats controller, Allyson Ashley, has decided to seek out potential special sales offers from other companies. One company, Patterson Union (PU)a toxic waste cleanup companyoffered to buy 10,000 pounds of olestra from NoFat during December for a price of 2.20 per pound. PU discovered through its research that olestra has proven to be very effective in cleaning up toxic waste locations designated as Superfund Sites by the U.S. Environmental Protection Agency. Allyson was excited, noting that This is another way to use our expensive olestra plant! The annual costs incurred by NoFat to produce and sell 100,000 pounds of olestra are as follows: In addition, Allyson met with several of NoFats key production managers and discovered the following information: The special order could be produced without incurring any additional marketing or customer service costs. NoFat owns the aging plant facility that it uses to manufacture olestra. NoFat incurs costs to set up and clean its machines for each production run, or batch, of olestra that it produces. The total setup costs shown in the previous table represent the production of 20 batches during the year. NoFat leases its plant machinery. The lease agreement is negotiated and signed on the first day of each year. NoFat currently leases enough machinery to produce 125,000 pounds of olestra. PU requires that an independent quality team inspects any facility from which it makes purchases. The terms of the special sales offer would require NoFat to bear the 1,000 cost of the inspection team. Assume for this question that NoFat rejected PUs special sales offer because the 2.20 price suggested by PU was too low. In response to the rejection, PU asked NoFat to determine the price at which it would be willing to accept the special sales offer. For its regular sales, NoFat sets prices by marking up variable costs by 10%. If Allyson decides to use NoFats 10% markup pricing method to set the price for PUs special sales offer, a. Calculate the price that NoFat would charge PU for each pound of olestra. b. Calculate the relevant profit that NoFat would earn if it set the special sales price by using its markup pricing method. (Hint: Use the estimate of relevant costs that you calculated in response to Requirement 1b.) c. Explain why NoFat should accept or reject the special sales offer if it uses its markup pricing method to set the special sales price.NoFat manufactures one product, olestra, and sells it to large potato chip manufacturers as the key ingredient in nonfat snack foods, including Ruffles, Lays, Doritos, and Tostitos brand products. For each of the past 3 years, sales of olestra have been far less than the expected annual volume of 125,000 pounds. Therefore, the company has ended each year with significant unused capacity. Due to a short shelf life, NoFat must sell every pound of olestra that it produces each year. As a result, NoFats controller, Allyson Ashley, has decided to seek out potential special sales offers from other companies. One company, Patterson Union (PU)a toxic waste cleanup companyoffered to buy 10,000 pounds of olestra from NoFat during December for a price of 2.20 per pound. PU discovered through its research that olestra has proven to be very effective in cleaning up toxic waste locations designated as Superfund Sites by the U.S. Environmental Protection Agency. Allyson was excited, noting that This is another way to use our expensive olestra plant! The annual costs incurred by NoFat to produce and sell 100,000 pounds of olestra are as follows: In addition, Allyson met with several of NoFats key production managers and discovered the following information: The special order could be produced without incurring any additional marketing or customer service costs. NoFat owns the aging plant facility that it uses to manufacture olestra. NoFat incurs costs to set up and clean its machines for each production run, or batch, of olestra that it produces. The total setup costs shown in the previous table represent the production of 20 batches during the year. NoFat leases its plant machinery. The lease agreement is negotiated and signed on the first day of each year. NoFat currently leases enough machinery to produce 125,000 pounds of olestra. PU requires that an independent quality team inspects any facility from which it makes purchases. The terms of the special sales offer would require NoFat to bear the 1,000 cost of the inspection team. Assume for this question that Allysons relevant analysis reveals that NoFat would earn a positive relevant profit of 10,000 from the special sale (i.e., the special sales alternative). However, after conducting this traditional, short-term relevant analysis, Allyson wonders whether it might be more profitable over the long term to downsize the company by reducing its manufacturing capacity (i.e., its plant machinery and plant facility). She is aware that downsizing requires a multiyear time horizon because companies usually cannot increase or decrease fixed plant assets every year. Therefore, Allyson has decided to use a 5-year time horizon in her long-term decision analysis. She has identified the following information regarding capacity downsizing (i.e., the downsizing alternative): The plant facility consists of several buildings. If it chooses to downsize its capacity, NoFat can immediately sell one of the buildings to an adjacent business for 30,000. If it chooses to downsize its capacity, NoFats annual lease cost for plant machinery will decrease to 9,000. Therefore, Allyson must choose between these two alternatives: Accept the special sales offer each year and earn a 10,000 relevant profit for each of the next 5 years or reject the special sales offer and downsize as described above. Assume that NoFat pays for all costs with cash. Also, assume a 10% discount rate, a 5-year time horizon, and all cash flows occur at the end of the year. Using an NPV approach to discount future cash flows to present value, a. Calculate the NPV of accepting the special sale with the assumed positive relevant profit of 10,000 per year (i.e., the special sales alternative). b. Calculate the NPV of downsizing capacity as previously described (i.e., the downsizing alternative). c. Based on the NPV of Requirements 5a and 5b, identify and explain which of these two alternatives is best for NoFat to pursue in the long term.
- Sacco Industries manufactures a popular interactive stuffed animal for children that requires three computer chips inside each toy. The company pays $2 for each computer chip. To help to guard against stockouts of the computer chip, Sacco Industries has a policy that states that the ending inventory of computer chips should be at least 25% of the following month's production needs. The production schedule for the first four months of the year is as follows: Stuffed animals to be produced January. . . . 5,600 February. . . 4,800 March. . . . . 4,200 April. . . . . . 4,000 Requirement Prepare a direct materials budget for the first quarter that shows both the number of computer chips needed and the dollar amount of the purchases in the budget.In March, Swim and Sport purchased designer bathing suits for $50 each. The original markup was 60% based on selling price. In May, the shop took a 25% markdown by having a sale. After three weeks, the sale was over and all merchandise was marked up15%. By July, many of the bathing suits were still in stock, so the shop took a 30% markdown to stimulate sales. At the end of August, the balance of the bathing suits were put on clearance sale with a final markdown of another 25%. Compute the intermediate prices and the final selling price of the bathing suits. Round to the nearest cent.Hoffman Industries manufactures a popular interactive stuffed animal for children that requires two computer chips inside each toy. The company pays $1 for each computer chip. To help to guard against stockouts of the computer chip, Hoffman Industries has a policy that states that the ending inventory of computer chips should be at least 30% of the following month's production needs. The production schedule for the first four months of the year is as follows: Stuffed animals to be produced January. . . . . 5,600 February. . . . 4,100 March. . . . . 4,900 April. . . . . . . 4,800 Requirement: Prepare a direct materials budget for the first quarter that shows both the number of computer chips needed and the dollar amount of the purchases in the budget. Prepare the direct materials budget by first calculating the total quantity needed, then complete the budget. Hoffman Industries Direct Materials Budget For the Months of…
- The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is thinking of expanding his sales by hiring high school students, on a commission basis, to sell sweatshirts bearing the name and mascot of the local high school. These sweatshirts would have to be ordered from the manufacturer six weeks in advance, and they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $18.00 each with a minimum order of 174 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 174. Since Hooper’s plan would not require any additional facilities, the only costs associated with the project would be the costs of the sweatshirts and the costs of the sales commissions. The selling price of the sweatshirts would be $36.00 each. Hooper would pay the students a commission of $5.00 for each shirt sold. Required: 1.What level of unit sales and dollar sales is needed to attain a target profit of $9,048? 2.…The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is thinking of expanding his sales by hiring high school students, on a commission basis, to sell sweatshirts bearing the name and mascot of the local high school. These sweatshirts would have to be ordered from the manufacturer six weeks in advance, and they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $8 each with a minimum order of 75 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 75. Since Hooper’s plan would not require any additional facilities, the only costs associated with the project would be the costs of the sweatshirts and the costs of the sales commissions. The selling price of the sweatshirts would be $13.50 each. Hooper would pay the students a commission of $1.50 for each shirt sold. Question: How many sweatshirts would Hooper need to sell to earn a target profit of $1,320?The Casings Plant of Wyoming Machines makes plastics shells for the company’s calculators. (Each calculator requires one shell.) For each of the next two years, Wyoming expects to sell 650,000 calculators. The beginning finished goods inventory of shells at the Casings Plant is 100,000 units. However, the target ending finished goods inventory for each year is 20,000 units. Each unit (shell) requires 6 ounces of plastic. At the beginning of the year, 200,000 ounces of plastic are in inventory. Management has set a target to have plastic on hand equal to four months’ sales requirements. Sales and production take place evenly throughout the year. Required: a. Compute the total targeted production of the finished product for the coming year. b. Compute the required amount of plastic to be purchased for the coming year. (Do not round intermediate calculations.)
- The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is thinking of expanding his sales by hiring high school students, on a commission basis, to sell sweatshirts bearing the name and mascot of the local high school. These sweatshirts would have to be ordered from the manufacturer six weeks in advance, and they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $20.00 each with a minimum order of 151 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 151. Since Hooper’s plan would not require any additional facilities, the only costs associated with the project would be the costs of the sweatshirts and the costs of the sales commissions. The selling price of the sweatshirts would be $40.00 each. Hooper would pay the students a commission of $8.00 for each shirt sold. Required: 1. What level of unit sales and dollar sales is needed to attain a target profit of…The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is thinking of expanding his sales by hiring high school students, on a commission basis, to sell sweatshirts bearing the name and mascot of the local high school. These sweatshirts would have to be ordered from the manufacturer six weeks in advance, and they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $17.00 each with a minimum order of 152 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 152. Since Hooper’s plan would not require any additional facilities, the only costs associated with the project would be the costs of the sweatshirts and the costs of the sales commissions. The selling price of the sweatshirts would be $34.00 each. Hooper would pay the students a commission of $4.00 for each shirt sold. Required: 1. What level of unit sales and dollar sales is needed to attain a target profit of $7,904?…am Montana manufactures bookcases for colleges and universities to use in dorm rooms. Each bookcase sells for P65. Due to the cyclical nature of the business, the company budgets two months ahead. ln early May, it is planning for july, its busiest month, The company plans to sell 114,500 bookcases in july. At the end of june, it expects to have 26,000 assembled bookcases in inventory, and it would like to have 3,000 bookcases in inventory at the end of july. What is the company's budgeted sales revenue for july?
