Company a and b manufactures the same article. Company a, relying mostly on machines, has fixed expenses of ₱12,000 per month and direct cost of ₱8.00 per unit. Company b, using more hand work, has fixed expenses of ₱4,000 and direct cost of ₱20 per unit. At what monthly production rate will total cost per unit is the same for the two companies. Create a cash-flow diagram if needed.
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Company a and b manufactures the same article. Company a, relying mostly on machines, has fixed expenses of ₱12,000 per month and direct cost of ₱8.00 per unit. Company b, using more hand work, has fixed expenses of ₱4,000 and direct cost of ₱20 per unit. At what monthly production rate will total cost per unit is the same for the two companies.
Create a cash-flow diagram if needed.
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- The Smith Company has one machine on which it can produce either of two products. X and Y. Sales demand for both products is such that the machine could operate at full lcapacity on either of the products, and Smith can sell all output at curren prices. Product X requires one hour of machine time per unit of output and Product Y requires two hours of machine timeper unit of output. The following information summarizes the per-unit cash inflow and costs of Products X and Y. Product X Product Y Selling Price $30 $55 Materials $ 4 $ 6 Labor 1 3 Allocated Portion of fixed cost $14 $26 Total Cost per Unit $19 $35 Gross Margin per Unit $11 $20 Selling costs are the same whether Smith productes Product X or Y, or both; you may ignore them. Should Smith Compny prduce Product X, Product Y, or some mixture of both? Why?Rahim Afrooz is a leading producer of automobile batteries. It turns out 1,500 batteries a day at a cost of Tk. 6 per battery for materials and labor. It takes the firm 22 days to convert raw materials into the battery. It allows its customers 40 days in which to pay for the batteries and the firm generally pays its suppliers in 30 days. a) What is the length of cash conversion cycle? b) If the firm always produces and sales 1,500 batteries a day, what amount of working capital must it finance? c) By what amount would the firm reduce its working capital financing needs if it was able to stretch its payables deferral period to 35 days?C2 Company had sales of Php576,000 and variable costs of Php324,000.Fixed costs amount to Php96,000 from an expected production of 7,200units. If the company expects to increase its sales by 960 units byincurring an additional Php24,000 for advertising expense, what willhappen to profit?
- XYZ Stadium Inc. has annual sales of P80,000,000 and keeps average inventory of P20,000,000. On average, the firm has accounts receivable of P16 ,000,000. The firm buys all raw materials on credit, its trade credit terms are net 35 days, and it pays on time. The firm’s managers are searching for ways to shorten the cash conversion cycle. If sales can be maintained at existing levels but inventory can be lowered by P4,000,000 and accounts receivable lowered by P2,000,000, what will be the net change in the cash conversion cycle? Use a 365-day year. Round to the closest whole day. A firm has an average age of inventory of 60 days, an average collection period of 45 days, and an average payment period of 30 days. The firm’s cash conversion cycle is A firm has a cash conversion cycle of 120 days, an average collection period of 25 days, and an average payment period of 50 days. The firm’s average age of inventory is A firm purchased raw materials on account and paid for them within…You need to determine the working capital using the cash conversion cycle method. If you have the following information regarding its costs and the economic cycle (of conversion into cash). And if the company has fixed total annual costs of $50,000 and variable costs of $100,000. Consider a year of 360 days. The product requires 12 hours of processing and the company works only one shift a day (8 hours), and the raw material takes 10 days to reach the plant. The product takes 3 days to reach the distributor. In addition, the following information is available: RAW MATERIAL STORAGE PERIOD : 16 days FINISHED GOODS INVENTARY PERIOD : 10 days CREDIT TO DISTRIBUTORS: 60 days SUPPLIER CREDITS: 45 DAYSPoisson Calculators has found that it is indifferent between purchasing a high-capacity vacuum component assembly machine or a lower capacity machine as long as sales are above 1,900 units per month. The price of each calculator is $70. The high-capacity machine has cash expenses of $100,000 per month and depreciation and amortisation expenses of $30,000 per month, while the alternative has cash expenses of $30,000 per month and depreciation and amortisation expenses of $5,000 per month. Under the low-capacity alternative, variable costs per unit are $60. If the company bases its decisions on the Accounting Operating Profit Break-even, then what is the variable cost per unit under the high-capacity alternative? a. $10 b. $47 c. $60 d. $70
- Nette and Company has sales of Php400,000 with variable costs of Php300,000, fixed costs of Php120,000 and an operating loss of Php20,000. By how much would Nette need to increase its sales in order to achieve a target operating income of 10% of sales?(Show the Cashflow Diagram if needed) A machine part to be fabricated may be made from alloy of either of two metals. There is an order for 10,000 units. Metal A costs 3 pesos per kg, while Metal B costs 9 pesos per kg. If Metal A is used, the material per unit weighs 110 grams; for metal B, 30 grams. When metal A is used, 50 units can be produced per hour; for metal B, 80 units per hour. Metal B fabrication requires the aid of a tool costing P1,000, which will be useless after the 10,000 units are finished. The machine operator's wage is P50 per hour. If all other costs are identical, determine which material will be more economical to finish the 10,000-unit order. How much is the total cost difference between the use of metal A and metal B?Michael Corporation spends Php 220,000 per annum on its collection department. The company has Php 12M in credit sales. Its average collection period is 2.5 months, and the percentage of bad debts loss is 4%. The company believes that if it were to double its collection personnel, it could bring down the average collection period to 2 months and bad debt losses to 3%. The added cost is Php 180,000, bringing total expenditures to Php 400,000 annually. Is the increased effort worthwhile if the opportunity cost of funds is 20%? If it is 10%?
- Please create an example of an Cash Flow Statment for this business: Total Cost of Production for One Month: Fixed Costs: Warehouse Space Rent $600.00 Wages $1800.00 Utilities (Water, Electricity, Gas) $700.00 Loan Repayment $800.00 Total $3900.00 Variable Costs: Ingredients: Fruits, Sweetener, Spices $1200.00 Plastic Bottles (1000) $900.00 Labels (1000) $300.00 Total $2400.00 Total Quantity Produced: 1000 Juice Bottles/ 500 Liters Time Period : One Month. Total Production Cost for One Month Period= Fixed Cost + Variable Costs = $3900.00+$2400.00 =$6300.00 Total Production Costs equates to $6300.00. Therefore Tropical Sips incurs a total of $6300.00 ec dollars for one month when 500 liters or 1000 500ml juice bottles are produced. At an introductory price of $7.00 each a total revenue of $7000.00 is generated. =1000 *$7.00= $7000.00 Thus at an introductory price of $7.00, a profit of $700.00 is generated.A company is considering expanding a production line, which is expected to remain operational for the foreseeable future. There are two machines, A and B, which could do the job. However, the two machinces are not the same. First of all the price of A is 400 MUSD and the price of B is 300 MUSD. Furthermore, A needs to be replaced every 8, whereas B needs to be replaced every 4. Otherwise, the machines perform similarly, producing 20 MUD additional cashflow every year. The firm's cost of capital is 22.0%, 1. What is the cost equivalent of A? MUSD/year 2. What is the npv of the project if A is selected? MUSDLily Products Company is considering an investment in one of two new product lines. The investment required for either product line is $540,000. The net cash flows associated with each product are as follows: Year Liquid Soap Body Lotion 1 170,000 90,000 2 150,000 90,000 3 120,000 90,000 4 100,000 90,000 5 70,000 90,000 6 40,000 90,000 7 40,000 90,000 8 30,000 90,000 Total $720,000 $720,000 a. Recommend a product offering to Lily Products Company, based on the cash payback period for each product line. _____ Payback period for liquid soap Payback period for body lotion b. The project with the _____ net cash flows in the early years of the project life will be favored over the one with the ____ net cash flows in the initial years.