A restaurant is considering adding fresh brook trout to itsmenu. Customers would have the choice of catching theirown trout from a simulated mountain stream or simply ask-ing the waiter to net the trout for them. Operating the streamwould require $10,600 in fixed costs per year. Variable costsare estimated to be $6.70 per trout. The firm wants to breakeven if 800 trout dinners are sold per year. What should bethe price of the new item?

Q: Mortech makes digital cameras for drones. Their basic digital camera uses $80 in variable costs and…

A: Variable costs are those costs that keeps on changing with change in the production level. This…

Q: The Arthur Company manufactures kitchen utensils. The company is currently producing well below its…

A: Variable cost per unit: =Average cost per unit - Fixed cost per unit

Q: Shelby Industries has a capacity to produce 45,000 oak shelves per year and is currently selling…

A: Shelby Industries has capacity to produce 45,000 oak shelves per year.   But they are Currently…

Q: A producer of microwave ovens has adopted an experience curve pricing approach for its new model.…

A: As per the learning curve or experience curve theory, the cost of producing an item reduces as and…

Q: Pappy's Potato has come up with a new product, the Potato Pet (they are freeze-dried to last…

A: The payback period is the time taken to recoup the initial investment   net present value is the…

Q: A restaurant owner is trying to decide between two different garbage disposals. A regular steel (RS)…

A: Regular Steel Initial Cost = 3500 N = 4 years Maintenance Cost at end of second year = 100…

Q: Pisa Pizza, a seller of frozen pizza, is considering introducing a healthier version of its pizza…

A: The level of incremental sales with new pizza is calculated below:

Q: Premo Pens, Inc., is in the process of developing a newpen to replace its existing top-of-the-line…

A: Target cost: In a competitive market, companies cannot set prices because the supply and demand…

Q: one-hour machine will be $150,000 per year. XYZ currently offers overnight film processing with…

A: Return on investment (ROI) is a statistic for determining how profitable an investment is.To measure…

Q: The Sweetwater Candy Company would like to buy a new machine that would automatically “dip"…

A: The net present value is one of the capital budgeting techniques, the investor should accept the…

Q: The Arthur Company manufactures kitchen utensils. The company is currently producing well below its…

A: The cost can be classified into two categories i.e fixed cost and variable cost. The  FIxed cost…

Q: Neptune Company has developed a small Inflatable toy that it is anxlous to Introduce to Its…

A: Formulas:

Q: The Hub Store at a university in eastern Canada is considering purchasing a self-serve checkout…

A: Saving on machine = $43,500 Cost of machine = $410,000 Time period = 10 years Operating cost per…

Q: The Hershey Kayak Making Co. is considering whether or not to make a key part for one of its kayak…

A: Solution: Relevant cost of buying = Purchase cost + Cost of preparation of purchase contract

Q: Pisa​ Pizza, a seller of frozen​ pizza, is considering introducing a healthier version of its pizza…

A:

Q: Nagle Electric, Inc., of Lincoln, Nebraska, mustreplace a robotic Mig welder and is evaluating two…

A: Given information is: Nagle Electric, Inc., of Lincoln, Nebraska, mustreplace a robotic Mig welder…

Q: The Cabinet Shoppe is considering the addition of a new line of kitchen cabinets to its current…

A: Contribution margin The contribution margin can be expressed in terms of gross or per unit. After…

Q: A manager is trying to decide whether to buy one machine or two. If only one machine is purchased…

A: The manager is trying to decide how many machine should to be purchased to fulfil the demand in the…

Q: Difend Cleaners has been considering the purchase of an industrial dry-cleaning machine. The…

A: Calculate net present value of the investment.

Q: Your boss asks you to evaluate the purchase of a new battery-operated toaster for his restaurant…

A: Given: Particulars Battery toaster Electric toaster Unit price $22 $150 Life 4 7 Operating…

Q: shreds, and distributes a variety of salad mixes in 2-pound bags. Doug Voss, Operations VP, is…

A: The cross over point is the point where total costs of different alternative are equal.

Q: Make or Buy Decisions “In my opinion, we ought to stop making our own drums and accept that outside…

A: 1. Financial advantage of per drum = making cost of per drum - Buying cost of per drum Financial…

Q: The Sweetwater Candy Company would like to buy a new machine that would automatically dip…

A: The question is based on the concept of Cost Accounting. Net present value is the difference between…

Q: Janelle Heinke, the owner of Ha'Peppas!, is considering a new oven in which to bake the firm's…

A: Variable cost means the cost which vary with the level of output and fixed cost means the cost which…

Q: The Sweetwater Candy Company would like to buy a new machine that would automatically “dip”…

A: Answer 1) Computation of Annual net cash inflows is as follows:

Q: The Sweetwater Candy Company would like to buy a new machine that would automatically “dip”…

A: The annual net cash inflows would be:Reduction in annual operating costs: Operating costs, present…

Q: The manager of a fast-food restaurant featuring hamburgers is adding salads to the menu. For each of…

A: Total cost =Fixed cost + (Variable cost per unit ×Volume)Total cost to make=$12000 + ($1.5 x…

Q: "In my opinion, we ought to stop making our own drums and accept that outside supplier's offer,"…

A: 1. Determination of financial advantage or disadvantage of buying drums from outside supplier for…

Q: 1. What are the annual net cash inflows that will be provided by the new dipping machine? 2. Compute…

A: Companies invest only in those machines and projects are profitable. To evaluate the profitability…

Q: A chemical engineer is considering two styles of pipes for moving distillate from a refinery to the…

A: Equivalent monthly cost is total cost of machine and monthly operating cost that is required for…

Q: Liquid Sleeve, Inc. is a company that makes a sealing solution for machine shaft surfaces that have…

A: NPV A variance between cash outflow (PV) and cash inflow (PV) over a time period.

Q: Konica Minolta plans to sell a copier that prints documents on both sides simultaneously, cutting in…

A: The computation is done below:

Q: The Sweetwater Candy Company would like to buy a new machine that would automatically “dip”…

A: 1. Determination of annual net cash inflows Annual savings in operating cost:   Operating cost…

Q: Cullumber's Candles will be producing a new line of dripless candles in the coming years and has the…

A: Break-even refers to covering all the costs without making a profit. At break-even point company…

Q: The Sweetwater Candy Company would like to buy a new machine that would automatically “dip"…

A: A net present value is the difference between present value of inflows of cash and present value of…

Q: Nagle​ Electric, Inc., of​ Lincoln, Nebraska, must replace a robotic Mig welder and is evaluating…

A: Formula: Total cost = Variable cost + Fixed cost Sum of both variable and fixed cost derives the…

Q: Claxton Chicken Exporters requires the refrigerated capacity to warehouse export meats. It is…

A: Leasing- It is a contract between two parties for use of an asset (usually a costly one). The party…

Q: A manager is trying to decide whether to buy one machine or two. If only one machine is purchased…

A: Net Present Value is the capital budgeting technique used to know the profitability of the project.…

Q: Eastman Publishing Company is considering publishing a paperbadk textbook on spreadsheet…

A: Calculate the breakeven point as follows:

Q: One of the bulk raw beverages, which Blanchard buys, is gin. Assume that the cost of purchasing…

A: The question is related to Inventory Management. The Economic Order Quantity is that level of…

Q: The Sweetwater Candy Company would like to buy a new machine that would automatically “dip”…

A: Solution: Part 1:

Q: Your company has an opportunity to enhance its plastic product by adding a new feature. To make the…

A: Cost of the new injection machine = $100,000 Increase in per unit cost of the product = $3 Increase…

Q: Pappy’s Potato has come up with a new product, the Potato Pet (they are freeze-dried to last…

A: GIVEN, initial cost = $950,000 fixed cost = $244,000 sales= $935,000 variable cost = 24% of sales=…

Q: You are in the mail-order business, selling computer peripherals, including high-speed Internet…

A: Net present worth analysis is an analysis in which we convert all the cash flows to present worth…

Q: Miller Cereals is a small milling company that makes a single brand of cereal. Recently, a business…

A: Below is the working with the formula:

Q: just spent $4,000 on a new software program that will help in organizing its inventory. Due to the…

A: Relevant costs  Relevant cost is the cost of employees  The differential cost is the relevant cost…

Q: Shelby about buying 1,200 shelves for a new project and is willing to pay $26 each. The shelves can…

A: Given Information : Capacity to produce = 45,000 shelves Currently selling  = 40,000 shelves…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.