Chicago Division has a required rate of return of 15%. The weighted average cost ofcapital is 10%. Information for Chicago Divisions operations over the past 2 yearsfollows.20x520x4Current assets$120,000$100,000Property, plant and equipment (cost)300,000280,000Accumulated depreciationCurrent liabilities80,00060,00090,00070,000Long-term debtPretax operating income85,00080,00052,80048,900Income tax rate30%30%What was the Chicago Division residual income for 20x5?a) $(12,540)b) $3,300c) $15,300d) $19,800

To calculate the Chicago Division's residual income for 20x5, we need to find the net operating…

Answered: Chicago Division has a required rate of…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Student tuition at Boehring University is $180 per semester credit hour. The state supplements school revenue by $80 per semester credit hour. Average class size for a typical 3-credit course is 50 students. Labor costs are $4,200per class, materials costs are $18 per student per class, and overhead costs are $24,000 per class. The multifactor productivity ratio currently is 1.34and the labor productivity ratio is $174.11per hour if the instructors work on an average of 14 hours per week for 16 weeks for each 3-creditclass of 50 students. Coach Bjourn Toulouse led the Big Red Herrings to several disappointing football seasons. Only better recruiting will return the Big Red Herrings to winning form. Because of the current state of the program, Boehring University fans are unlikely to support increases in the $192 season ticket price. Improved recruitment will increase overhead costs to $35,000per class section from the current $24,000 per class section. The university's…
(a) Explain how the long-run average cost curves will differ between a private hospital and a soft-drink manufacturing company, and discuss how this would affect the optimum output level in each company. (b) Formidable Manufacturing Company has the following cost functions in the short run, where production level, Q is measured in ‘000s of units:?? = 0.5?3 − 2?2 + 5??? = 7(i) Calculate the optimum output level for this company in the short run (ii) Calculate the marginal cost for this company at a production level of 2,500 units(iii) The industry for in which Formidable Manufacturing Company operates classifies its members by the following output:Size Micro Small Medium LargeOutput (Q): 0-1000 1000-3000 3000-6000 >6000In the long run, the AVC for this industry is given by: ??? = 0.4?2 − 3? + 15.Determine the optimum plant size for this industry. (c) In merging with Air Jamaica, Caribbean Airlines sought to gain an advantage from operating with economies of scale. Discuss the ways in…
Roger Corporation operates in two states, as indicated below. This year’s operations generated $400,000 of apportionable income. (info numbers attached) Compute Roger’s State A taxable income assuming that State A apportions income based on a: Three-factor formula, equally weighted. Three-factor formula, with a double-weighted sales factor. Sales factor only.
You have been asked to estimate the cost of 100 prefabricated structures to be sold to a local school district. Each structure provides 1,000 square feet offloor space, with 8-feet ceilings. In 1999, you produced 70 similar structures consistingof the same materials and having the same ceiling height, but each provided only 800square feet of floor space. The material cost for each structure was $25,000 in 1999, andthe cost capacity factor is 0.65. The cost index values for 1999 and 2006 are 200 and 289,respectively. The estimated manufacturing cost for the first 1,000-square-foot structureis $12,000. Assume a learning curve of 88% and use the cost of the 50th structure asyour standard time for estimating manufacturing cost. Estimate the total material costand the total manufacturing cost for the 100 prefabricated structures.
Goldratt’s “Theory of Constraints”A 2-3 line answer/explanation is enough for each question.#1. What is the goal? #2. Alex’s thinking seems to be “distorted” by conventional management accounting metrics. What problem or problems does this lead to?#3. What are the three operational measurements? Include a one or two sentence description of each. #4. How is each operational measurement computed? #5. Of the three measures, which measure has the greatest impact on profitability? Briefly, describe why this differential impact might be true.#6. What are the five focusing steps as first described? #7. What are the five focusing steps that are finally settled upon? #8. What are the six “takeaways” on how to drive continuous improvement? #9. How might this approach be useful almost any organization)? #10. Any other comments that you care to make. *** Your general assessment of TOC. *** *** Of special interest is any experience you might have had with using the TOC. Basic situation or…
Hickory Manufacturing Company forecasts the following demand for a product (in thousands of units) over the next five years. Year 1 2 3 4 5 Forecast demand 62 84 86 90 90 Currently the manufacturer has seven machines that operate on a two-shift (eight hours each) basis. Thirty days per year are available for scheduled maintenance of equipment with no process output. Assume there are 250 workdays in a year. Each manufactured good takes 20 minutes to produce. What is the effective capacity of the factory? Round your answer down to the nearest whole number. units/year Given the five-year forecast, how much extra capacity is needed each year? Use a minus sign to enter an answer, if there is excess capacity. Round your answers to the nearest whole number. Year 1 2 3 4 5 Extra capacity needed (units) Does the firm need to buy more machines? If so, how many? When? If your answer is zero, enter "0". Round your answers up to the nearest whole number.…
As a Program Manager, you have been asked to evaluate a furniture manufacturer’s cash to cash conversion cycle under the following assumptions: sales of $23.5 million, cost of goods sold of 420.8 million, 50 operating weeks a year, total average on hand inventory of $2,150,000, accounts receivable equal to $2,455,000, and accounts payable of $3,695,000. What do you conclude? What recommendations can you make to improve performance? What would be the impact of reducing the accounts payable from $3,695,000to $2,000,000 and all other data remained the same? Please show in detail these impacts quantitatively in your answers.
b) Suppose a monopolistically competitive firm operates in a long run which produces 40 units of output at 120 taka per-unit cost (average total cost). Also MC of producing 40 unit output is 60 taka. By using this information, show the long run situation of a monopolisticallycompetitive firm in an appropriate diagram. c) Calculate excess capacity if socially efficient output is 100 units. Show it in graph too. [Note: b) and c) are related questions and draw separate graphs for each question]. Show all step. Answer must be correct.
Student tuition at Boehring University is $150 per semester credit hour. The state supplements school revenue by $80 per semester credit hour. Average class size for a typical 3-credit course is 45 students. Labor costs are $4,000 per class, materials costs are $18 per student per class, and overhead costs are $26,000 per class. The multifactor productivity ratio currently is 1.01 and the labor productivity ratio is $138.62 per hour if the instructors work on an average of 14 hours per week for 16 weeks for each 3-credit class of 45 students. Coach Bjourn Toulouse led the Big Red Herrings to several disappointing football seasons. Only better recruiting will return the Big Red Herrings to winning form. Because of the current state of the program, Boehring University fans are unlikely to support increases in the $192 season ticket price. Improved recruitment will increase overhead costs to $33,000 per class section from the current $26,000 per class section. The…
Jack’s Packs manufactures backpacks made from microfabrics.The cutting department prepares the material for use by thebackpack stitching department. The cutting department can cutenough material to make 200 backpacks per day. The backpackstitching department produces 90 backpacks per day. Annualdemand for the product is 22,500 units. The company operates250 days per year. Estimated setup cost is $60. Annual holdingcost is $6 per backpack.(a) Calculate the economic production quantity for the cuttingdepartment.(b) Calculate the total annual costs for the EPQ.
Tonwal group operates in such a dynamic environment that the top management stresses achieving the targets under all situations. What consequences of such an approach may have on Tonwal’s operations? How can the budgetary slack cause negative consequences on Tonwal’s long-term operations?
1. JJ Boutique has opened four new stores in college towns across the state. Data on monthly sales volume and labor hours are given below. Which store location has the highest labor productivity? 2. JJ Boutique’s accountant (from problem 1) suggests that monthly rent and hourly wage rate also be factored into the productivity calculations. Store A pays the highest average wage at $5.70 an hour; Store B pays $5.50 an hour; Stare C $5 and Store D $4.50. The cost to rent store space is about $1,600 a month in Store A, $2,100 in Store B, $1,000 a month in Store C and $800 a month in Store D. Which store is most productive? 3. JJ Boutique is not sure it can keep all stores open. Based on multifactor productivity, which store would you close?

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