In both country Alpha and country Beta, average labor productivity is $40,000 per worker per year. The population of Alpha is 200,000 and the population of Beta is 400,000. Forty percent of the population in each country is employed. Total output in Alpha is and total output in Beta is Multiple Choice $3.2 billion; $6.4 billion $8 billion; $16 billion $80,000 $160,000 $2.4 billion, $4.8 billion.

In both country Alpha and country Beta, average labor productivity is $40,000 per worker per year. The population of Alpha is 200,000 and the population of Beta is 400,000. Forty percent of the population in each country is employed. Total output in Alpha is and total output in Beta is Multiple Choice $3.2 billion; $6.4 billion $8 billion; $16 billion $80,000 $160,000 $2.4 billion, $4.8 billion.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 19E: A company is spending 70,000 per year for inspecting, 60,000 per year for purchasing, and 56,000 per...

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A company is spending 70,000 per year for inspecting, 60,000 per year for purchasing, and 56,000 per year for reworking products. What is a good estimate of non-value-added costs? a. 126,000 b. 70,000 c. 56,000 d. 130,000
Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of $30,000, and invested assets of $600000. What is the return on investment for Division A? A. 20% B. 25% C. 33% D. 40%
Banyan Industries has two divisions, a tax rate of 30%, and a minimum rate of return of 20%. Division A has a weighted average cost of Capital of 9.5% and is looking at a new project that will generate a profit of $1,200,000 from a machine that costs $4,000,000. Division B has a weighted average cost of capital of 9.5% and is looking at a new project that will generate a profit of $1,350,000 from a machine that costs $5,000.000. A. Calculate the EVA for each of Banyans divisions. B. Calculate the RI for each of Banyans division. C. If Banyan uses EVA to evaluate the projects, which division has the better project and by how much? D. If Banyan uses RI, which division has the better project and by how much? E. What are some of the reasons for the similarity or difference that you found in the use of EVA versus RI?
Papa Johns International, Inc. (PZZA), operates over 5,000 restaurants in the United States and 45 countries. The company operates primarily as a franchisor with 4,353 franchised restaurants and 744 company-operated restaurants. Recent data (in millions) for the company-operated and North America franchised restaurants are as follows: a. Determine the profit margin for each segment. Round to one decimal place. b. Determine the investment turnover for each segment. Round to two decimal places. c. Use the DuPont formula to determine the return on investment for each segment. Round to one decimal place. d. Analyze and interpret the results of (a), (b), and (c).
The manager of the Apple Division of Mobile Company expects the following results in 2016 (pesos in millions): Sales 49,600,000 Variable Costs 29,760,000 Contribution Margin 19,840,000 Fixed Costs 12,000,000 Profit 7,840,000 Investment: Plant Equipment 19,510,000 Working Capital 14,880,000 34,390,000 Present ROI (7,840,000/34,390,000) 22.80% The division has a target ROI of 30%, and the manager has asked you to determine how much sales volume the division would need to reach that. He states that the sales mix is relatively constant so variable costs should be close to 60% of sales, fixed cost and plant and equipment should remain constant, and working capital (cash, receivables, and inventories) should vary closely with sales in the percentage reflected above. The peso sales that the division needs to reach in order to reach the 30% target ROI
Suppose a firm must employ 20 workers in order to produce 2,000 units of output that the firm has contracted to supply to the government for $1.4 million. The firm must choose how much to invest in safety. The firm can choose any level of safety, S, from 0 to 100. The cost of safety is C( S) = 50S2. Given the firm’s choice of safety, the annual salary paid to workers is determined byAnnual salary = 60,000 - 300SThus, a firm that chooses S = 30 pays $45,000 for this level of safety and pays each worker $51,000. What level of safety will the firm choose, and how much does this cost? How much will each worker earn? How much profit will the firm earn?
Various i nancial data for the past two years follow. Calculate the total productivity measureand the partial measures for labor, capital, and raw materials for this company for both years. What do these measures tell you about this company? Last Year This YearOutput: Sales $200,000 $220,000Input: Labor 30,000 40,000 Raw materials 35,000 45,000 Energy 5,000 6,000 Capital 50,000…
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Lillian Fok is president of Lakefront Manufacturing, a producer of bicycle tires. Fok makes 1,000 tires per day with the following resources: Labor: 400 hours per day @ $12.50 per hour Raw material: 20,000 pounds per day @ $1 per pound Energy: $5,000 per day Capital costs: $10,000 per day What is the labor productivity per labor hour for these tires at Lakefront Manufacturing? What is the multifactor productivity for these tires at Lakefront Manufacturing? What is the percent change in multifactor productivity if Fok can reduce the energy bill by $1,000 per day without cutting production or changing any other inputs?
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A company's invested capital is $13,000,000 and management has determined that the target rate of return on investment is 10%. Last year, the company produced 121,313 units and this year expects to units sales to be 10% above last year. The cost of the product is estimated to be $13 per unit. What is the target operating income per unit? (Round any intermediary calculations to the nearest unit and your final answer to the nearest cent.) a. $9.74 b. $9.00 c. $8.31 d. $8.99
Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $1,250,000 $2,000,000 Variable costs 750,000 1,250,000 Contribution margin $500,000 $750,000 Fixed costs 400,000 450,000 Income from operations $100,000 $300,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. b. How much would income from operations increase for each company if the sales of each increased by 20%? If required, round answers to nearest whole number.