Problem 16-17 (Algo)The U.S. Airfilter company has hired you as a supply chain consultant. The company makes air filters for residential heating and air-conditioning systems. These filters are made in a single plant located in Louisville, Kentucky, in the United States. They are distributedto retallers through wholesale centers in 100 locations in the United States, Canada, and Europe. You have collected the following datarelating to the value of Inventory in the U.S. Airfilter supply chain:Sales (total quarter):United statesCanadaEuropeCost of goods sold (total quarter)Raw materials at the Louisville plant(end-of-quarter)Work-in-process and finished goods atthe Louisville plant (end-of-quarter)Distribution center inventory(end-of-quarter):United statesCanadaEuropeAverage inventory turnoverQUARTER 1(JANUARYTHROUGHMARCH)4461116148893184QUARTER 3(JULYTHROUGHSEPTEMBER)JUNE)All amounts in millions of U.S. dollars45197QUARTER 2(APRIL THROUGH4367240O Reduce the amount of Inventory or increase sales or bothO Reduce the amount of Inventory or reduce sales or bothO Increase the amount of Inventory or Increase sales or both43467124532054241674558857131a. What is the average Inventory turnover for the firm? (Round your answer to 3 decimal places.)34289b. If you were given the assignment to Increase Inventory turnover, what would you focus on?QUARTER 4(OCTOBERTHROUGHDECEMBER)524166195699826658246c. The company reported that it used $500M worth of raw material during the year. On average, how many weeks of supply of rawmaterial are on hand at the factory? (Round your answer to 2 decimal places.)Weeks of raw material supply

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Description: Problem 16-17 (Algo)The U.S. Airfilter company has hired you as a supply chain consultant. The company makes air filters for residential heating and air-conditioning systems. These filters are made in a single plant located in Louisville, Kentucky,

Inventory Turn over Ratio :— Inventory turnover is a financial ratio showing how many times a…

Business

Accounting

Distribution center inventory (end-of-quarter): United states Canada Europe 497 45 19 53 5 34 20 9 a. What is the average Inventory turnover for the firm? (Round your answer to 3 decimal places.) Average inventory turnover b. If you were given the assignment to Increase Inventory turnover, what would you focus on? O Reduce the amount of Inventory or increase sales or both Reduce the amount of Inventory or reduce sales or both O Increase the amount of Inventory or Increase sales or both 58 24 6 c. The company reported that it used $500M worth of raw material during the year. On average, how many weeks of supply of raw material are on hand at the factory? (Round your answer to 2 decimal places.) Weeks of raw material supply

Distribution center inventory (end-of-quarter): United states Canada Europe 497 45 19 53 5 34 20 9 a. What is the average Inventory turnover for the firm? (Round your answer to 3 decimal places.) Average inventory turnover b. If you were given the assignment to Increase Inventory turnover, what would you focus on? O Reduce the amount of Inventory or increase sales or both Reduce the amount of Inventory or reduce sales or both O Increase the amount of Inventory or Increase sales or both 58 24 6 c. The company reported that it used $500M worth of raw material during the year. On average, how many weeks of supply of raw material are on hand at the factory? (Round your answer to 2 decimal places.) Weeks of raw material supply

Financial & Managerial Accounting

13th Edition

ISBN:9781285866307

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter22: Performance Evaluation Using Variances From Standard Costs

Section: Chapter Questions

Problem 22.24EX: Nonfinancial performance measures Diamond Inc. is an Internet retailer of woodworking equipment....

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Nonfinancial performance measures Diamond Inc. is an Internet retailer of woodworking equipment. Customers order woodworking equipment from the company, using an online catalog. The company processes these orders and delivers the requested product from its warehouse. The company wants to provide customers with an excellent purchase experience in order to expand the business through favorable word-of-mouth advertising and to drive repeat business. To help monitor performance, the company developed a set of performance measures for its order placement and delivery process: Average computer response time to customer "clicks'' Dollar amount of returned goods Elapsed time between customer order and product delivery Maintenance dollars divided by hardware investment Number of customer complaints divided by the number of orders Number of misfilled orders divided by the number of orders Number of orders per warehouse employee Number of page faults or errors due to software programming errors Number of software fixes per week Server (computer) downtime Training dollars per programmer A. For each performance measure, identify it as either an input or output measure related to the order placement and delivery process. B. Provide an explanation for each performance measure.
QUESTION TWOa) The Chisokone Company located in Chimwemwe manufactures typewriters called AK4 model Z. The company has an average total inventory of K15, 000,000 and places 12,000 orders every year. Order details are as follows:Purchase department expenses……………………………..K400, 000Stores warehouse personnel salary……………………......K400, 000Obsolescence, spoilage, etc…………………………………K120, 000Floor space charge related to stores activities…………….K260, 000Cost of collecting materials…………………………………..K60, 000Cost of receiving materials…………………………………...K70, 000Cost of Inspection……………………………………………..K100, 000Cost of material handling for warehousing activities………K300, 000Cost of bill payment……………………………………………K170, 000Interest…………………………………………………………..11.5%Insurance charges………………………………………………1.9%The company wants to buy a certain component, whose cost is K24 each and the annual requirement is 34,560 units. Calculate the following:i. The cost of placing an order.ii. The cost of carrying inventory as a percentage…
Question 19 Answer the following questions using the information below: Samantha's Office Supplies manufactures desk organizers in its Processing Department. Direct materials are included at the inception of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection takes place as units are placed into production. After inspection, some units are spoiled due to nondetectible material defects. Spoiled units generally constitute 4% of the good units. Data provided for February 2012 are as follows: WIP, beginning inventory 2/1/2012 50,000 units Direct materials (100% complete) Conversion costs (50% complete) Started during February 164,000 units Completed and transferred out 162,000 units WIP, ending inventory 2/29/2012 30,000 units Direct materials (100% complete) Conversion costs (25% complete) Costs: WIP, beginning inventory: Direct materials $ 300,000 Conversion costs 88,000 Direct…
PROBLEM 1.ABC Manufacturing is a producer of a local product used in house cleaning, called Agent C. The production manager isrequired to present a production report for the month August, however he got no idea on what information he neededfor the report, and what analysis could be made to help the top management on their decision-making.The production manager sought your expertise on the subject matter and gave to you the following information:Sales (in Pesos) 4,957,875.00Sales Volume 22,500.00Variable Costs:Cost of Direct Raw Materials 895,000.00Cost of Direct Labor 530,000.00Cost of Packaging Materials 124,200.00Fixed Costs:Monthly Depreciation 650,000.00Monthly Rent of Warehouse 100,000.00Fixed Monthly Allowance for Electricity 675,000.00Other Fixed Manufacturing Overhead 146,700.00Required:BREAKEVEN ANALYSIS1. Compute the selling price per unit of Agent C. _________________2. Compute the variable cost per unit of Agent C. _________________3. Compute the variable cost rate of Agent…
5-17 Coast Hierarchy; Teledor Inc. manufactures boomboxes (music system with radio, MP3, and compact disc player) for a different well known companies. The boomboxes differ significantly in their complexity and the batch sizes in which they are manufactured. The following cost were in incurred in 2018. Indirect Manufacturing Labour Cost such as supervision that supports direct manufacturing labour, $1,500,000. Procurement Cost of placing purchased orders, receiving materials, and paying suppliers that are related to the number of purchased orders placed, $800,000. Cost of indirect Materials $450,000. Cost incurred to set up machines each time a different product needs to be manufactured, $900,000. Designing processes, drawing process charts, making engineering process for products $900,000. Machine related overhead cost such as depreciation, maintenance, production, engineering, $1,200,000. these resources are related to the activity of running the machines. Plant management, plant…
12-16. Amanda M is a regional manufacturer and wholesaler of high-quality chocolate candies. The company’s sales and collection process is as follows. Amanda M makes use of an enterprise-wide information system with electronic data interchange (EDI) capability. No paper documents are exchanged in the sales and collection process. The company receives sales orders from customers electronically. Upon receipt of a sales order, shipping department personnel prepare goods for shipment and input shipping data into the information system. The system sends an electronic shipping notice and invoice to the customer at the time of shipment. Terms are net 30. When payment is due, the customer makes an electronic funds transfer for the amount owed. The customer’s information system sends remittance (payment) data to Amanda M. Amanda M’s information system updates accounts-receivable information at that time.Draw a context diagram and a level 0 logical data flow diagram for Amanda M’s sales and…
Required information Skip to question [The following information applies to the questions displayed below.] Federated Manufacturing Inc. (FMI) produces electronic components in three divisions: industrial, commercial, and consumer products. The commercial products division annually purchases 11,400 units of part 23–6711, which the industrial division produces for use in manufacturing one of its own products. The commercial division is growing rapidly. The commercial division is expanding its production and now wants to increase its purchases of part 23–6711 to 16,400 units per year. The problem is that the industrial division is at full capacity. No new investment in the industrial division has been made for some years because top management sees little future growth in its products, so its capacity is unlikely to increase soon. The commercial division can buy part 23–6711 from Advanced Micro Inc. or from Admiral Electric, a customer of the industrial division now purchasing 720…
Required information Skip to question [The following information applies to the questions displayed below.] Federated Manufacturing Incorporated (FMI) produces electronic components in three divisions: industrial, commercial, and consumer products. The commercial products division annually purchases 13,800 units of part 23–6711, which the industrial division produces for use in manufacturing one of its own products. The commercial division is growing rapidly; it is expanding its production and now wants to increase its purchases of part 23–6711 to 18,800 units per year. The problem is that the industrial division is at full capacity. No new investment in the industrial division has been made for some years because top management sees little future growth in its products, so its capacity is unlikely to increase soon. The commercial division can buy part 23–6711 from Advanced Micro Incorporated or from Admiral Electric, a customer of the industrial division now purchasing 840 units…
Problem 12 Compute the Cost of Goods Sold for 2020 of Pillows Company considering the followinginformation:  Raw materials purchased was P2,500,000 with freight-in of P120,000 Purchase returns was P50,000 and purchase discount is 60% of purchase returns Raw materials beginning was P460,000 Raw materials end was P40,000 more than the beginning inventory Direct labor is P1,000,000 Factory overhead is 50% of direct labor Total goods placed in process is 150% of manufacturing cost WIP, end is 75% of WIP, beg Finished goods beginning balance is lesser by P100,000 than the ending balance whichwas P600,000
Apples & Oranges Inc. is trying to become more efficient in shipping goods. It is experimenting with two new shipping procedure initiatives aimed at achieving this strategic objective. The company has provided the following data regarding the two procedures after one month of implementation: Line Item Description Shipping Procedure A Shipping Procedure B Number of shipping errors 144 120 Hours from ordered to shipped 17.3 20.2 Shipping time (hours from shipped to delivered) 6.7 9.5 Pounds of goods shipped 1,520,000 720,000 Number of shipments 400 300 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. Open spreadsheet a. Compute the following performance metrics for each…
Stage 2 ABC for a Wholesale CompanyInformation is presented for the activity costs of Brighton Wholesale Company: Activity Cost per Unit of Activity Driver Customer relations $82.00 per customer per month Selling 0.09 per sales dollar Accounting 7.00 per order Warehousing 0.60 per unit shipped Packing 0.35 per unit shipped Shipping 0.40 per pound shipped The following information pertains to Brighton Wholesale Company's activities in Colorado for the month of June 2017: Number of orders 320 Sales revenue $218,000 Cost of goods sold $98,100 Number of customers 40 Units shipped 5,400 Pounds shipped 81,000 RequiredDetermine the profitability of sales in Colorado for June 2017.Do not use a negative sign with your answers. Profitability of Sales in Colorado March 2017 Sales revenue Answer Less: Cost of goods sold Answer Customer relations Answer Selling expenses Answer Accounting Answer Warehousing Answer…
Exhibit 4.22 presents selected operating data for three retailers for a recent year. Macys operates several department store chains selling consumer products such as brand-name clothing, china, cosmetics, and bedding and has a large presence in the bridal and formalwear markets (under store names Macys and Bloomingdales). Home Depot sells a wide range of building materials and home improvement products, which includes lumber and tools, riding lawn mowers, lighting fixtures, and kitchen cabinets and appliances. Supervalu operates grocery stores under numerous brands (including Albertsons, Cub Foods, Jewel-Osco, Shaws, and Star Market). Exhibit 4.22 REQUIRED a. Compute the rate of ROA for each firm. Disaggregate the rate of ROA into profit margin for ROA and assets turnover components. Assume that the income tax rate is 35% for all companies. b. Based on your knowledge of the three retail stores and their respective industry concentrations, describe the likely reasons for the differences in the profit margins for ROA and assets turnovers.