A tablet computer is being designed with the following estimated costs Material costs $16.50 Labor costs 6.00 Overheads 15.00 What wholesale price needs to be charged if they want to make a gross profit of 40%?
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- The Rocky Mountain Publishing Company isconsidering introducing a new morning newspaper inDenver. Its direct competitor charges $0.25 at retailwith $0.05 going to the retailer. For the level of newscoverage the company desires, it determines the fixedcost of editors, reporters, rent, pressroom expenses,and wire-service charges to be $300,000 per month.The variable cost of ink and paper is $0.10 per copy,but advertising revenues of $0.05 per paper will begenerated. To print the morning paper, the publisherhas to purchase a new printing press, which will cost$600,000. The press machine will be depreciatedaccording to a seven-year MACRS class. The pressmachine will be used for 10 years, at which time itssalvage value would be about $100,000. Assume 300issues per year, a 40% tax rate, and a 13% MARR.How many copies per day must be sold to break evenat a retail selling price of $0.25 per paper?A Civil Engineer is considering establishing his own company. An investment of $4,000,000 will berequired, which will be recovered in 15 years.It is estimated that revenue will be $8,000,000 per year and that operating expenses will be as follows:Materials $1,600,000 per yearLabor $2,800,000 per yearOverhead $400,000 + 10% of the yearly revenueOther expenses $600,000 per yearThe engineer will give up his regular job paying $2,160,000 per year and devote his time fulltime to theoperation of the business; this will result in decreasing labor costs by $400,000 per year, material costs by$280,000 per year and overhead cost by $320,000 per year. If the man expects to earn at least 20% ofhis capital, should he invest? NOTE: Use Annual Worth Method.A Civil Engineer is considering establishing his own company. An investment of $4,000,000 will berequired, which will be recovered in 15 years.It is estimated that revenue will be $8,000,000 per year and that operating expenses will be as follows:Materials $1,600,000 per yearLabor $2,800,000 per yearOverhead $400,000 + 10% of the yearly revenueOther expenses $600,000 per yearThe engineer will give up his regular job paying $2,160,000 per year and devote his time fulltime to theoperation of the business; this will result in decreasing labor costs by $400,000 per year, material costs by$280,000 per year and overhead cost by $320,000 per year. If the man expects to earn at least 20% ofhis capital, should he invest? NOTE: Use Future Worth Method.
- The managers of PonchoParts, Inc. plan to manufacture engine blocks for classic cars from the 1960s era. They expect to sell 250 blocks annually for the next five years. The necessary foundry and machining equipment will cost a total of $800,000 and belongs in a 30% CCA class for tax purposes. The firm expects to be able to dispose of the manufacturing equipment for $150,000 at the end of the project. Labour and materials costs total $500 per engine block, fixed costs are $125,000 per year. Assume a 35% tax rate and a 12% discount rate. What is the minimum bid price the firm should set as a sale price for the blocks if the firm were in a bidding situation? a. $2382 b. $1692 c. $1934Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 15,000 units. Southeastern estimates its annual holding cost for this item to be $25 per unit. The cost to place and process an order from the supplier is $75. The company operates 300 days per year, and the lead time to receive an order from the supplier is 2 working days. a) Find the economic order quantity. b) Find the annual holding costs. c) Find the annual ordering costs. d) What is the reorder point?A process plant making 5000 kg/day of a product selling for $1.75/kg has annual variable production cost of $2M at 100 % capacity and fixed costs of $700,000. What is the fixed cost per kg at the break even point ? If the selling price of the product is increased by 10%, what is the dollar increase in net profit at full capacity if the income tax rate is 35% of the gross earnings?
- Calculate the B/C ratio (modified) of a building that houses students during their classroom discussion. Theaccommodation equates to P525,000 annually. However, the annual maintenance is P135,000. Its constructioncosts for about 2.3 M. If sold 20 years from its first operating year, it will amount to P250,000. Take MARR = 15% Please solve using economics formula.Consider a project to supply Detroit with 27,000 tons of machine screws annually for automobile production. You will need an initial $4,600,000 investment in threading equipment to get the project started; the project will last for 5 years. The accounting department estimates that annual fixed costs will be $1,100,000 and that variable costs should be $205 per ton; accounting will depreciate the initial fixed asset investment straight-line to zero over the 5-year project life. It also estimates a salvage value of $475,000 after dismantling costs. The marketing department estimates that the automakers will let the contract at a selling price of $308 per ton. The engineering department estimates you will need an initial net working capital investment of $440,000. You require a return of 12 percent and face a tax rate of 23 percent on this project. a. Suppose you’re confident about your own projections, but you’re a little unsure about Detroit’s actual machine screw…Outdoor Sports is considering adding a putt putt golf course to its facility. The course would cost $167,000, would be depreciated on a straight-line basis over its 6-year life, and would have a zero salvage value. The sales would be $84,000 a year, with variable costs of $27,400 and fixed costs of $12,000. In addition, the firm anticipates an additional $15,300 in revenue from its existing facilities if the putt putt course is added. The project will require $2,600 of net working capital, which is recoverable at the end of the project. What is the net present value of this project at a discount rate of 12 percent and a tax rate of 40 percent?
- A food processing plant consumes 600,000 kW of electric energy annually and pays an average of ₱ 2.00 per kWh. A study is being made to generate its own power to supply the energy required in the food processing plant, and the power plant installation would cost ₱ 2,000,000.00. Annual operation and maintenance is ₱ 800,000, other expenses cost ₱ 100,000 per year. The life of the power plant is 15 years; salvage value at the end of life is ₱ 200,000; annual taxes and insurances, 6% of first cost; and interest rate is 15%. Determine if the power plant is justifiable using: a. Rate of Return Method b. Annual Worth Method c. Present Worth Method d. Future Worth MethodTo automate one of its production processes, theMilwaukee Corporation bought three flexible manufacturing cells at a price of $400,000 each. Whenthey were delivered, Milwaukee paid freight chargesof $20,000 and handling fees of $15,000. Site preparation for these cells cost $45,000. Six foremen, eachearning $20 an hour, worked five 40-hour weeks toset up and test the manufacturing cells. Special wiring and other materials applicable to the new manufacturing cells cost $3,500. Determine the cost basis(amount to be capitalized) for these cells.Zodiac Furniture is considering the production of anew line of metal offi ce chairs. Th e chairs can be producedin-house using either process A or process B. Th e chairs canalso be purchased from an outside supplier. Specify the levelsof demand for each processing alternative given the costs in thetable. Fixed Cost Variable Cost Process A $20,000 $30Process B $30,000 $50Outside Supplier $0 $50