An automated turning machine is the current constraint at Jordison Corporation. Three products use this constrained resource. Data concerning those products appear below. LN JQ $168.82 $313.84 $403.08 $139.72 $245.80 $287.56 4. 20 RQ Selling price per unit Variable cost per unit Minutes on the constraint 1.50 7.60 Rank the products in order of their current profitability from most profitable to least profitable, In other words, rank the products in the order in which they should be emphasized. (Round your Intermedlate calculations to 2 decimal places.)
Q: An automated turning machine is the current constraint at the company. Three products use this…
A: In order to determine the contribution margin per unit, the variable cost per unit is required to be…
Q: An automated turning machine is the current constraint at Jordison Corporation. Three products use…
A: The product which has the highest contribution based on the constraint is ranked first and the…
Q: Head Pops Inc. manufactures two models of solar-powered, noise-canceling headphones: Sun Sound and…
A: Analysis indicating the increase in total profitability:
Q: The constraint at Rauchwerger Corporation is time on a particular machine. The company makes three…
A: The profitability in the above question can be measure on the basis of contribution per unit and per…
Q: Peppertree Company has two divisions, East and West. Division East manufactures a component that…
A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…
Q: Letter Systems Inc. has a limited amount of direct material available for products 1A1 and 2B2. Each…
A: Contribution Margin can be define as the margin remains of sales revenue after deducting the…
Q: Voice Com desires a profit equal to a 16% rate of return on invested assets of $599,700. a.…
A: Solution Note Dear student as per the Q&A guideline we are required to answer the first three…
Q: A business encountered the following problem while choosing between alternative locations X and Y.…
A: The selling price of a product can be selected based on the expected cost and desired profit. Cost…
Q: Company P, uses the product cost method of applying the cost-plus approach to product pricing. The…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: MyPhone, Inc. uses the product cost method of applying the cost-plus approach to product pricing.…
A: a. Compute the amount of desired profit from the production and sale of 5,080 cell phones:
Q: Kenmore Company manufactures two products. Both products have the same sales price, and the volume…
A: (10). Expected decrease in revenue ($75,000) Expected decrease in total variable costs 64,250…
Q: Jaybird Company operates in a highly competitive market where the market price for its praduct is…
A: Desired profit = No. of units sold x sales price x profit rate = 5000*145*30% = $217,500
Q: Seved Spring Corp. has two divisions, Daffodil and Tulip. Daffodil produces a gadget that Tulip…
A: Note: As per general rule, in the case of sufficient capacity available, the minimum transfer price…
Q: PT. XYZ currently has two profit centers, namely division X and division Y. Division X produces…
A: Transfer Price is the price at which one division of enterprise sells the product to the other…
Q: An automated turning machine is the current constraint at Jordison Corporation. Three products use…
A: The ranking preference is given to products that has the highest contribution earned for every…
Q: Marchete Company produces a single product. They have recently received the results of a market…
A: Break-even analysis is a technique used widely by the production management. It helps to determine…
Q: A firm manufactures a product that sells for $16 per unit. Variable cost per unit is $8 and fixed…
A: Hi student Since there are multiple subparts, we will answer only first three subparts. Variable…
Q: Marchete Company produces a single product. They have recently received the results of a market…
A: Break-even refers to covering all the costs without making a profit. At break-even point company…
Q: Paty Ltd operating business of containers and it is contemplating two cost structures for its…
A: Break-even point (BEP): Break-even point= Fixed cost /Contribution margin per unit Desired…
Q: Head Pops Inc. manufactures two models of solar-powered, noise-canceling headphones: Sun Sound and…
A: Cost can be of two types: Variable cost and Fixed cost. Variable cost changes with the change in the…
Q: Unit Costs Variable Cost (in Direct materials 2 Direct labor 2.4 Indirect Manufacturing 1.6…
A: Solution: Relevant Variable cost = Direct materials + direct labor + indirect manufacturing +…
Q: The next two questions are based on Yellow Company is considering the introduction of a new product…
A: The mark up percentage in the absorption cost approach is calculated by dividing the sum of the…
Q: The constraint at Rauchwerger Corporation is time on a particular machine. The company makes three…
A: From the given information, Product WX has a profitability of $10.53/min i.e.$335.15-$259.327.20on…
Q: JJ Manufacturing builds and sells switch harnesses for glove boxes. The sale sprice and variable…
A: Overall Contribution margin per unit is the weighted average contribution margin where sales mix is…
Q: Company E has two divisions, Division A and Division B. Division A is currently buying Component X…
A: Given Division A purchases X @ $14 from market Division B manufactures X and has a excess capacity.…
Q: Company E has two divisions, Division A and Division B. Division A is currently buying Component X…
A: Transfer price means the amount to be charged by one division from another division of the same…
Q: Moon Bright Sdn. Bhd. is a manufacturer of dish cleaners. The following figures show the cost per…
A: Given, Selling price RM 200 Direct materials RM 80 Direct labor…
Q: The Chromosome Manufacturing Company produces two products, X and Y. The company president, Gene…
A: 1) Overhead cost allocated to X based on labor hours=Total overhead cost×(Labor hour of X/Labor hour…
Q: Sako Company's Audio Division produces a speaker that Is used by manufacturers of varlous audio…
A: Here opportunity cost to be considered in minimum transfer price
Q: Jaybird Company operates in a highly competitive market where the market price for its product is…
A: Reduction in cost required per unit = Total cost per unit - Target cost Total cost per unit = Total…
Q: Break-even (in units) fill in the blank 1 Break-even (in dollars) $fill in the blank 2
A: In accounting, the break-even point is calculated by dividing the fixed costs of production by the…
Q: Brevard Industries produces two products. Information about the products is as follows: Units…
A: The decision for dropping a product line decreases the variable cost and traceable fixed cost but…
Q: Nita Corp.'s Department II is introducing a new product that will use component C. An outside…
A: When Talking about the overall profitability of the company, the departmental transfer price should…
Q: The Chromosome Manufacturing Company produces two products, X and Y. The company president, Gene…
A: Overhead expenses refers to all those expenses which are considered as continuos form of expenses…
Q: Banfield Corporation makes three products that use compound W, the current constrained resource.…
A: Contribution margin states the total revenue amount which is available after the variable costs for…
Q: Merlot Manufacturing Ltd makes three different products, the details of which are as follows:…
A: When there is some constraint in production like labour hours or machine hours is limited, then…
Q: Blue Company developed the following information for its product:…
A: Break-even analysis is a technique widely used by the production department. It helps to determine…
Q: Company E has two divisions, Division A and Division B. Division A is currently buying Component X…
A: Division A has excess capacity therefore there will be no opportunity cost. The cost-based transfer…
Q: Voice Com, Inc., uses the product cost method of applying the cost-plus approach to product pricing.…
A: Disclaimer: “Since you have posted a question with multiple sub-parts, we will solve the first three…
Q: Company E has two divisions, Division A and Division B. Division A is currently buying Component X…
A: Minimum Transfer Price that Division B is willing to Charge = $8.87 Maximum Transfer Price that…
Q: The constraint at Corporaion is time on a particular machine. The company makes three products that…
A: Solution:- Ranking the products in order of their current profitability from most profitable to…
Q: Diversity Ltd. produces and sells a product called Star. The company is currently selling 9,560…
A: The question is related to Marginal Costing and Cost Volume Profit Analysis. The income statement as…
Q: The constraint at Rauchwerger Corporation is time on a particular machine. The company makes three…
A: WX KD FS Selling price 335.2 228.48 199.23 Less: variable costs 259.22 173.04 159.57…
Q: An automated turning machine is the current constraint at Jordison Corporation. Three products use…
A: Contribution margin per unit = Selling price per unit - Variable cost per unit Contribution margin…
Q: Peyton Company manufactures Phone X and Phone Y. Peyton can sell all it can make of either. Based on…
A: Key factor refers to a factor of production whose availability is limited.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- Manufacturing builds and sells switch harnesses for glove boxes. The sales price and variable cost for each follows: Their sales mix is reflected in the ratio 4:4:1. If annual fixed costs shared by the three products are $1 8840 how many units of each product will need to be sold in order forJj to break even?Manatoah Manufacturing produces 3 models of window air conditioners: model 101, model 201, and model 301. The sales price and variable costs for these three models are as follows: The current product mix is 4:3:2. The three models share total fixed costs of $430,000. Calculate the sales price per composite unit. What is the contribution margin per composite unit? Calculate Manatoahs break-even point in both dollars and units. Using an income statement format, prove that this is the break-even point.Galaxy Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVs), the Conquistador and Hurricane, from a single manufacturing facility. The manufacturing facility operates at 100% of capacity. The following per-unit information is available for the two products: In addition, the following sales unit volume information for the period is as follows: a. Prepare a contribution margin by product report. Compute the contribution margin ratio for each. b. What advice would you give to the management of Galaxy Sports Inc. regarding the profitability of the two products?
- The profit function for two products is: Profit3x12+42x13x22+48x2+700, where x1 represents units of production of product 1, and x2 represents units of production of product 2. Producing one unit of product 1 requires 4 labor-hours, and producing one unit of product 2 requires 6 labor-hours. Currently, 24 labor-hours are available. The cost of labor-hours is already factored into the profit function, but it is possible to schedule overtime at a premium of 5 per hour. a. Formulate an optimization problem that can be used to find the optimal production quantity of products 1 and 2 and the optimal number of overtime hours to schedule. b. Solve the optimization model you formulated in part (a). How much should be produced and how many overtime hours should be scheduled?Salvador Manufacturing builds and sells snowboards, skis and poles. The sales price and variable cost for each follows: Their sales mix is reflected in the ratio 7:3:2. If annual fixed costs shared by the three products are $196,200, how many units of each product will need to be sold in order for Salvador to break even?Stahman, Inc., estimates its hidden external failure costs using the Taguchi loss function. Stahlman produces plastic sheets that vary in thickness and grade. For one of its large-volume products, it was determined that k = 30,000 and T = 0.28 inches in diameter. A sample of four units produced the following values: Required: 1. Calculate the average loss per unit. 2. Assuming that 100,000 units were produced, what is the total hidden cost? 3. Assume that the multiplier for Stahmans hidden external failure costs is six. What are the measured external costs? Explain the difference between measured costs and hidden costs.
- Nutterco, Inc., produces two types of nut butter: peanut butter and cashew butter. Of the two, peanut butter is the more popular. Cashew butter is a specialty line using smaller jars and fewer jars per case. Data concerning the two products follow: aPractical capacity less expected usage (all unused capacity is permanent). bIn some cases, activity capacity must be purchased in steps (whole units). These steps are provided as necessary. The cost per step is the fixed activity rate multiplied by the step units. The fixed activity rate is the expected fixed activity costs divided by practical activity capacity. Annual overhead costs are listed below. These costs are classified as fixed or variable with respect to the appropriate activity driver. aCosts associated with practical activity capacity. The machine fixed costs are all depreciation with direct labor hours as the driver. bThese costs are for the actual levels of the cost driver. Required: 1. Prepare a traditional segmented income statement, using a unit-level overhead rate based on direct labor hours. Using this approach, determine whether the cashew butter product line should be kept or dropped. 2. Prepare an activity-based segmented income statement. Repeat the keep-or-drop analysis using an ABC approach.The management of Hartman Company is trying to determine the amount of each of two products to produce over the coming planning period. The following information concerns labor availability, labor utilization, and product profitability: a. Develop a linear programming model of the Hartman Company problem. Solve the model to determine the optimal production quantities of products 1 and 2. b. In computing the profit contribution per unit, management does not deduct labor costs because they are considered fixed for the upcoming planning period. However, suppose that overtime can be scheduled in some of the departments. Which departments would you recommend scheduling for overtime? How much would you be willing to pay per hour of overtime in each department? c. Suppose that 10, 6, and 8 hours of overtime may be scheduled in departments A, B, and C, respectively. The cost per hour of overtime is 18 in department A, 22.50 in department B, and 12 in department C. Formulate a linear programming model that can be used to determine the optimal production quantities if overtime is made available. What are the optimal production quantities, and what is the revised total contribution to profit? How much overtime do you recommend using in each department? What is the increase in the total contribution to profit if overtime is used?Salem Electronics currently produces two products: a programmable calculator and a tape recorder. A recent marketing study indicated that consumers would react favorably to a radio with the Salem brand name. Owner Kenneth Booth was interested in the possibility. Before any commitment was made, however, Kenneth wanted to know what the incremental fixed costs would be and how many radios must be sold to cover these costs. In response, Betty Johnson, the marketing manager, gathered data for the current products to help in projecting overhead costs for the new product. The overhead costs based on 30,000 direct labor hours follow. (The high-low method using direct labor hours as the independent variable was used to determine the fixed and variable costs.) All depreciation. The following activity data were also gathered: Betty was told that a plantwide overhead rate was used to assign overhead costs based on direct labor hours. She was also informed by engineering that if 20,000 radios were produced and sold (her projection based on her marketing study), they would have the same activity data as the recorders (use the same direct labor hours, machine hours, setups, and so on). Engineering also provided the following additional estimates for the proposed product line: Upon receiving these estimates, Betty did some quick calculations and became quite excited. With a selling price of 26 and just 18,000 of additional fixed costs, only 4,500 units had to be sold to break even. Since Betty was confident that 20,000 units could be sold, she was prepared to strongly recommend the new product line. Required: 1. Reproduce Bettys break-even calculation using conventional cost assignments. How much additional profit would be expected under this scenario, assuming that 20,000 radios are sold? 2. Use an activity-based costing approach, and calculate the break-even point and the incremental profit that would be earned on sales of 20,000 units. 3. Explain why the CVP analysis done in Requirement 2 is more accurate than the analysis done in Requirement 1. What recommendation would you make?
- Hudson Corporation is considering three options for managing its data warehouse: continuing with its own staff, hiring an outside vendor to do the managing, or using a combination of its own staff and an outside vendor. The cost of the operation depends on future demand. The annual cost of each option (in thousands of dollars) depends on demand as follows: If the demand probabilities are 0.2, 0.5, and 0.3, which decision alternative will minimize the expected cost of the data warehouse? What is the expected annual cost associated with that recommendation? Construct a risk profile for the optimal decision in part (a). What is the probability of the cost exceeding $700,000?Morrill Company produces two different types of gauges: a density gauge and a thickness gauge. The segmented income statement for a typical quarter follows. Includes depreciation. The density gauge uses a subassembly that is purchased from an external supplier for 25 per unit. Each quarter, 2,000 subassemblies are purchased. All units produced are sold, and there are no ending inventories of subassemblies. Morrill is considering making the subassembly rather than buying it. Unit-level variable manufacturing costs are as follows: No significant non-unit-level costs are incurred. Morrill is considering two alternatives to supply the productive capacity for the subassembly. 1. Lease the needed space and equipment at a cost of 27,000 per quarter for the space and 10,000 per quarter for a supervisor. There are no other fixed expenses. 2. Drop the thickness gauge. The equipment could be adapted with virtually no cost and the existing space utilized to produce the subassembly. The direct fixed expenses, including supervision, would be 38,000, 8,000 of which is depreciation on equipment. If the thickness gauge is dropped, sales of the density gauge will not be affected. Required: 1. Should Morrill Company make or buy the subassembly? If it makes the subassembly, which alternative should be chosen? Explain and provide supporting computations. 2. Suppose that dropping the thickness gauge will decrease sales of the density gauge by 10 percent. What effect does this have on the decision? 3. Assume that dropping the thickness gauge decreases sales of the density gauge by 10 percent and that 2,800 subassemblies are required per quarter. As before, assume that there are no ending inventories of subassemblies and that all units produced are sold. Assume also that the per-unit sales price and variable costs are the same as in Requirement 1. Include the leasing alternative in your consideration. Now, what is the correct decision?An automated turning machine is the current constraint at Jordison Corporation. Three products use this constrained resource. Data concerning those products appear below: LN JQ RQ Selling price per unit $ 167.36 $ 303.39 $ 411.96 Variable cost per unit $ 136.00 $ 212.11 5 303.18 Minutes on the constraint 1.60 5.60 7.40 Rank the products in order of their current profitability from most profitable to least profitable. In other words, rank the products in the order in which they should be emphasized. (Round your intermediate calculations to 2 decimal places)