Naturalmaid processes organic milk into plain yogurt. Naturalmaid sells plain yogurt to hospitals, nursing homes, and restaurants in bulk, one-gallon containers. Each batch, processed at a cost of $880, yields 750 gallons of plain yogurt. The company sells the one-gallon tubs for $5.00 each and spends $0.14 for each plastic tub. Naturalmaid has recently begun to reconsider its strategy. Management wonders if it would be more profitable to sell individual-sized portions of fruited organic yogurt at local food stores. Naturalmaid could further process each batch of plain yogurt into 16,000 individual portions (3/4 cup each) of fruited yogurt. A recent market analysis indicates that demand for the product exists. Naturalmaid would sell each individual portion for $0.58. Packaging would cost $0.06 per portion, and fruit would cost $0.10 per portion. Fixed costs would not change. Should Naturalmaid continue to sell only the gallon-sized plain yogurt (sell as is) or convert the plain yogurt into individual-sized portions of fruited yogurt (process further)? Why? Calculate the net benefit per batch under each alternative. (Enter a "0" for any zero amounts. Round the net benefit per batch to the nearest whole dollar.) Less: Net benefit per unit Net benefit per batch Sell as gallon-size Sell as individual containers portions
Q: Shankar Company uses a perpetual system to record inventory transactions. The company purchases…
A: Accounting Equation is calculated using following equation -Assets = Liabilities + EquityEvery…
Q: Head-First Company plans to sell 4,400 bicycle helmets at $78 each in the coming year. Unit variable…
A: Contribution margin is the difference between selling price and variable cost. At break-even…
Q: SP 19 Santana Rey expects sales of Business Solutions' line of computer workstation furniture to…
A: S.NoMarginal CostingAbsorption Costing1As the name suggests itself variable cost is considered in…
Q: costs from $576,600 to $470,500. Prepare an analysis showing whether the st two columns, enter costs…
A: To decide if the machine must be replaced or retained , all relevant cost must be considered.
Q: Potaw Company reported the following data at the end of 2019: Sales revenue (80% on credit) Expenses…
A: Days to collect receivables is calculated by dividing number of days in a year by account receivable…
Q: Required information [The following information applies to the questions displayed below] At the…
A: Depreciation is an accounting term which is used to depreciate the book value of fixed assets due to…
Q: You deposit $300 each month into an account earning 7% interest ce a) How much will you have in the…
A: Based on an expected interest rate or rate of return, the future value reflects how much money…
Q: Gen is a new sole proprietor. By the end of January 2022, she needs to issue what document to any…
A: The issuance of tax documents to independent contractors to whom a business pays $600 or more for…
Q: The following selected information is from Princeton Company's comparative balance sheets. At…
A: In this question, The Ending balance of common stock and Additional paid-in capital is more than the…
Q: Amy and Lester are partners in operating a store. Without consulting Amy, Lester enters into a…
A: In a general partnership, each partner has the authority to act on behalf of the partnership within…
Q: Stock Number 23-879 20-253 44-981 165-874 60-358 68-847 52-986 35-456 Cost $4.94 $7.98 $21.78 $20.79…
A: Sale Price = Cost price + mark up costMark upcost = Cost Price * markup%Cost Price = Markup cost/…
Q: Required information Ramos Co. provides the following sales forecast and production budget for the…
A: MANUFACTURING OH BUDGETManufacturing OH Budget is the Management Estimation of Manufacturing OH Cost…
Q: On January 1, 2020, Pronghorn Company purchased 6% bonds, having a maturity value of $550,000 for…
A: Investment means an asset purchased in expectation of earning a return on such investment in future…
Q: At December 31, a company reports the following results for its calendar year. $3,406,000 $1,679,410…
A: Bad Debt Expense is a ledger used to record provision made for uncollectible accounts. For those…
Q: Paul Gee Limited buys and resells machines. Paul Geel is known to buy and sell in the City. During…
A: Trading company purchases goods at a lower rate and sells them at a higher price to make a profit.…
Q: Luisa Crimini has been operating a beauty shop in a college town for the past 10 years. Recently,…
A: Honor Code: As per Honor Code we are advised to solve a maximum of three subparts of the…
Q: Charla Corporation is owned eighty percent (80%) by Jeanette and twenty percent (20%) by Victoria…
A: Complete Liquidation is the process of closing down a corporation, selling its assets, paying off…
Q: The following data is available for the Duffy Manufacturing Company for the month of October 2014:…
A: Cost of goods sold means actual cost of goods that are being sold to customers. Gross margin is…
Q: The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson…
A: A company's current financial needs to pay for future pension liabilities are calculated actuarially…
Q: 2.00 pomies Which of the following transactions would generally result in an investing cash inflow?…
A: CASH FLOW STATEMENTCash flow statement provides additional information to user of financial…
Q: In its first month of operations, Literacy for the Illiterate opened a new bookstore and bought…
A: Weighted Average Method is one of the methods of inventory valuation in which it is assumed that…
Q: Required information Exercise 6-9 (Algo) Record transactions using a perpetual system (LO6-5) [The…
A: Journal Entry :— It is an act of recording transactions in books of account when transaction…
Q: ecording journal entries for net sales with credit sales and sales discounts. The following…
A: The journal entries are prepared to record the transactions on regular basis. The net method records…
Q: Joey is carrying on
A: The Australian tax year runs from 1 July to 30 June. However, a corporation may apply to adopt a…
Q: Splish Inc. incurred a net operating loss of $515,000 in 2025. The tax rate for all years is 20%.…
A: A corporation experiences a net operational loss during the tax year in which its deductions (such…
Q: In keeping with a modernization of corporate statutes in its home state, UMC Corporation decided in…
A: Journal entries are the first process in the accounting cycle. All the transactions which occur…
Q: Current ratios Working capital A/R turnover Inventory Turnover Asset turnover Total debt to total…
A: Ratio analysis is a quantitative process that examines financial records and statements to provide…
Q: MSI has been approached by a fourth-grade teacher from Portland about the possibility of creating a…
A: Direct material cost is the cost of the material which is directly involved in the production. It…
Q: The following information is available for Shanika Company for 20Y6: Inventories Materials Work in…
A: The cost of goods manufactured includes the cost of goods that are finished during the period. The…
Q: On October 5, Blue Spruce Corporation buys merchandise for resale on account from Swifty…
A: Journal entry is the first stage where the business transaction are entered in the books of…
Q: The following events pertain to the Zabel Soccer Supply Shop for February 2004, its first month of…
A: The journal entries are prepared to record the transactions on regular basis. The cost of goods sold…
Q: es Specter Company combines cash and cash equivalents on the balance sheet. Using the following…
A: Cash and cash equivalents :— It is the liquid assets that includes cash and current assets that are…
Q: Assume a company has two manufacturing departments - Assembly and Fabrication. The company considers…
A: The overhead allocation is a method of allocating indirect costs to the goods produced. It can be…
Q: The following transactions are July activities of Bennett's Bowling, Incorporated, which operates…
A: ACCOUNTING EQUATIONAccounting Equation is a Financial Accounting Technique which represents the…
Q: At the beginning of the year, a company estimated that 20,000 direct labor-hours would be required…
A: The overhead is applied to the production on the basis of predetermined overhead rate. The…
Q: Marvel Parts, Incorporated, manufactures auto accessories including a set of seat covers that can be…
A: The variance is the difference between the actual and standard production data. The variance can be…
Q: 1. Recognized $84,000 of revenue on account. 2. Collected $78,000 cash from accounts receivable. 3.…
A: Horizontal statement model arranges the financial data into a horizontal across model. This…
Q: XYZ, Incorporated, makes foam seat cushions for the automotive and aerospace industries. The…
A: Activity-based costing is a cost allocation method that identifies and assigns overhead expenses to…
Q: Assume that on January 1, 2022, after paying interest, Wildhorse calls bonds having a face value of…
A: Journal is a record keeping tool used to initially record financial transactions. It's the first…
Q: How many months are we using to estimate overhead costs for the service center?
A: Regression analysis is a statistical method used to analyze the relationship between two or more…
Q: Required information [The following information applies to the questions displayed below.] In 2024,…
A: The question is based on the concept of Financial Accounting.In case of construction contracts…
Q: Gator Shoes, Incorporated, manufactures a line of stylish waterproof footwear. The following…
A: Investments are goods or property bought with the intention of making money or appreciating in…
Q: Assume that the Oslo Ice Cream Company is considering the costs of two of their product lines-ice…
A: The overhead is assigned to the production on the basis of the pre-determined overhead rate. The…
Q: Required Information [The following information applies to the questions displayed below] The first…
A: Weighted Average Method :— Under this method, Equivalent units is calculated by adding equivalent…
Q: Pharoah Company has the following information available for September 2022. Unit selling price of…
A: Income statement is a financial statement that shows profitability, total revenue and total…
Q: Problem 16-74 (Static) Variance Computations with Missing Data (LO 16-5, 6) Anthon Corporation has…
A: The variance is an important part of cost accounting. The variance is used to control the cost and…
Q: Lazer Tag manufactures computer parts within a relevant range of 50,000 to 100,000 units per year.…
A: Variable cost is the cost that changes with change in the activity of cost driver used. The variable…
Q: Premium Amortization On the first day of the fiscal year, a company issues a $2,900,000, 7%, 4-year…
A: Lets understand the basics.Amortization of premium or discount can be done using,(1) Effective…
Q: Use the 5 lease criteria to determine if the following lease qualifies as a Capital, Financing…
A: A lease is defined as a contractual agreement incorporated between two business entities where one…
Q: *P6.8 (LO 4), AP Bieber Inc. is a retailer operating in Calgary, Alberta. Bieber uses the perpetual…
A: Inventory can be valued using various methods -First-in First-Out Method - Under the First-in…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Bienestar, Inc., has two plants that manufacture a line of wheelchairs. One is located in Kansas City, and the other in Tulsa. Each plant is set up as a profit center. During the past year, both plants sold their tilt wheelchair model for 1,620. Sales volume averages 20,000 units per year in each plant. Recently, the Kansas City plant reduced the price of the tilt model to 1,440. Discussion with the Kansas City manager revealed that the price reduction was possible because the plant had reduced its manufacturing and selling costs by reducing what was called non-value-added costs. The Kansas City manufacturing and selling costs for the tilt model were 1,260 per unit. The Kansas City manager offered to loan the Tulsa plant his cost accounting manager to help it achieve similar results. The Tulsa plant manager readily agreed, knowing that his plant must keep pacenot only with the Kansas City plant but also with competitors. A local competitor had also reduced its price on a similar model, and Tulsas marketing manager had indicated that the price must be matched or sales would drop dramatically. In fact, the marketing manager suggested that if the price were dropped to 1,404 by the end of the year, the plant could expand its share of the market by 20 percent. The plant manager agreed but insisted that the current profit per unit must be maintained. He also wants to know if the plant can at least match the 1,260 per-unit cost of the Kansas City plant and if the plant can achieve the cost reduction using the approach of the Kansas City plant. The plant controller and the Kansas City cost accounting manager have assembled the following data for the most recent year. The actual cost of inputs, their value-added (ideal) quantity levels, and the actual quantity levels are provided (for production of 20,000 units). Assume there is no difference between actual prices of activity units and standard prices. Required: 1. Calculate the target cost for expanding the Tulsa plants market share by 20 percent, assuming that the per-unit profitability is maintained as requested by the plant manager. 2. Calculate the non-value-added cost per unit. Assuming that non-value-added costs can be reduced to zero, can the Tulsa plant match the Kansas City per-unit cost? Can the target cost for expanding market share be achieved? What actions would you take if you were the plant manager? 3. Describe the role that benchmarking played in the effort of the Tulsa plant to protect and improve its competitive position.Ingles Corporation is a manufacturer of tables sold to schools, restaurants, hotels, and other institutions. The table tops are manufactured by Ingles, but the table legs are purchased from an outside supplier. The Assembly Department takes a manufactured table top and attaches the four purchased table legs. It takes 16 minutes of labor to assemble a table. The company follows a policy of producing enough tables to ensure that 40 percent of next months sales are in the finished goods inventory. Ingles also purchases sufficient materials to ensure that materials inventory is 60 percent of the following months scheduled production. Ingless sales budget in units for the next quarter is as follows: Ingless ending inventories in units for July 31 are as follows: Required: 1. Calculate the number of tables to be produced during August. 2. Disregarding your response to Requirement 1, assume the required production units for August and September are 2,100 and 1,900, respectively, and the July 31 materials inventory is 4,000 units. Compute the number of table legs to be purchased in August. 3. Assume that Ingles Corporation will produce 2,340 units in September. How many employees will be required for the Assembly Department in September? (Fractional employees are acceptable since employees can be hired on a part-time basis. Assume a 40-hour week and a 4-week month.) (CMA adapted)Country Diner currently makes cookies for its boxed lunches. It uses 40,000 cookies annually in the production of the boxed lunches. The costs to make the cookies are: A potential supplier has offered to sell Country Diner the cookies for $0.85 each. If the cookies are purchased, 10% of the fixed overhead could be avoided. If Jason accepts the offer, what will the effect on profit be?
- NoFat manufactures one product, olestra, and sells it to large potato chip manufacturers as the key ingredient in nonfat snack foods, including Ruffles, Lays, Doritos, and Tostitos brand products. For each of the past 3 years, sales of olestra have been far less than the expected annual volume of 125,000 pounds. Therefore, the company has ended each year with significant unused capacity. Due to a short shelf life, NoFat must sell every pound of olestra that it produces each year. As a result, NoFats controller, Allyson Ashley, has decided to seek out potential special sales offers from other companies. One company, Patterson Union (PU)a toxic waste cleanup companyoffered to buy 10,000 pounds of olestra from NoFat during December for a price of 2.20 per pound. PU discovered through its research that olestra has proven to be very effective in cleaning up toxic waste locations designated as Superfund Sites by the U.S. Environmental Protection Agency. Allyson was excited, noting that This is another way to use our expensive olestra plant! The annual costs incurred by NoFat to produce and sell 100,000 pounds of olestra are as follows: In addition, Allyson met with several of NoFats key production managers and discovered the following information: The special order could be produced without incurring any additional marketing or customer service costs. NoFat owns the aging plant facility that it uses to manufacture olestra. NoFat incurs costs to set up and clean its machines for each production run, or batch, of olestra that it produces. The total setup costs shown in the previous table represent the production of 20 batches during the year. NoFat leases its plant machinery. The lease agreement is negotiated and signed on the first day of each year. NoFat currently leases enough machinery to produce 125,000 pounds of olestra. PU requires that an independent quality team inspects any facility from which it makes purchases. The terms of the special sales offer would require NoFat to bear the 1,000 cost of the inspection team. Based solely on financial factors, explain why NoFat should accept or reject PUs special sales offer.NoFat manufactures one product, olestra, and sells it to large potato chip manufacturers as the key ingredient in nonfat snack foods, including Ruffles, Lays, Doritos, and Tostitos brand products. For each of the past 3 years, sales of olestra have been far less than the expected annual volume of 125,000 pounds. Therefore, the company has ended each year with significant unused capacity. Due to a short shelf life, NoFat must sell every pound of olestra that it produces each year. As a result, NoFats controller, Allyson Ashley, has decided to seek out potential special sales offers from other companies. One company, Patterson Union (PU)a toxic waste cleanup companyoffered to buy 10,000 pounds of olestra from NoFat during December for a price of 2.20 per pound. PU discovered through its research that olestra has proven to be very effective in cleaning up toxic waste locations designated as Superfund Sites by the U.S. Environmental Protection Agency. Allyson was excited, noting that This is another way to use our expensive olestra plant! The annual costs incurred by NoFat to produce and sell 100,000 pounds of olestra are as follows: In addition, Allyson met with several of NoFats key production managers and discovered the following information: The special order could be produced without incurring any additional marketing or customer service costs. NoFat owns the aging plant facility that it uses to manufacture olestra. NoFat incurs costs to set up and clean its machines for each production run, or batch, of olestra that it produces. The total setup costs shown in the previous table represent the production of 20 batches during the year. NoFat leases its plant machinery. The lease agreement is negotiated and signed on the first day of each year. NoFat currently leases enough machinery to produce 125,000 pounds of olestra. PU requires that an independent quality team inspects any facility from which it makes purchases. The terms of the special sales offer would require NoFat to bear the 1,000 cost of the inspection team. Assume for this question that NoFat rejected PUs special sales offer because the 2.20 price suggested by PU was too low. In response to the rejection, PU asked NoFat to determine the price at which it would be willing to accept the special sales offer. For its regular sales, NoFat sets prices by marking up variable costs by 10%. If Allyson decides to use NoFats 10% markup pricing method to set the price for PUs special sales offer, a. Calculate the price that NoFat would charge PU for each pound of olestra. b. Calculate the relevant profit that NoFat would earn if it set the special sales price by using its markup pricing method. (Hint: Use the estimate of relevant costs that you calculated in response to Requirement 1b.) c. Explain why NoFat should accept or reject the special sales offer if it uses its markup pricing method to set the special sales price.NoFat manufactures one product, olestra, and sells it to large potato chip manufacturers as the key ingredient in nonfat snack foods, including Ruffles, Lays, Doritos, and Tostitos brand products. For each of the past 3 years, sales of olestra have been far less than the expected annual volume of 125,000 pounds. Therefore, the company has ended each year with significant unused capacity. Due to a short shelf life, NoFat must sell every pound of olestra that it produces each year. As a result, NoFats controller, Allyson Ashley, has decided to seek out potential special sales offers from other companies. One company, Patterson Union (PU)a toxic waste cleanup companyoffered to buy 10,000 pounds of olestra from NoFat during December for a price of 2.20 per pound. PU discovered through its research that olestra has proven to be very effective in cleaning up toxic waste locations designated as Superfund Sites by the U.S. Environmental Protection Agency. Allyson was excited, noting that This is another way to use our expensive olestra plant! The annual costs incurred by NoFat to produce and sell 100,000 pounds of olestra are as follows: In addition, Allyson met with several of NoFats key production managers and discovered the following information: The special order could be produced without incurring any additional marketing or customer service costs. NoFat owns the aging plant facility that it uses to manufacture olestra. NoFat incurs costs to set up and clean its machines for each production run, or batch, of olestra that it produces. The total setup costs shown in the previous table represent the production of 20 batches during the year. NoFat leases its plant machinery. The lease agreement is negotiated and signed on the first day of each year. NoFat currently leases enough machinery to produce 125,000 pounds of olestra. PU requires that an independent quality team inspects any facility from which it makes purchases. The terms of the special sales offer would require NoFat to bear the 1,000 cost of the inspection team. Assume for this question that Allysons relevant analysis reveals that NoFat would earn a positive relevant profit of 10,000 from the special sale (i.e., the special sales alternative). However, after conducting this traditional, short-term relevant analysis, Allyson wonders whether it might be more profitable over the long term to downsize the company by reducing its manufacturing capacity (i.e., its plant machinery and plant facility). She is aware that downsizing requires a multiyear time horizon because companies usually cannot increase or decrease fixed plant assets every year. Therefore, Allyson has decided to use a 5-year time horizon in her long-term decision analysis. She has identified the following information regarding capacity downsizing (i.e., the downsizing alternative): The plant facility consists of several buildings. If it chooses to downsize its capacity, NoFat can immediately sell one of the buildings to an adjacent business for 30,000. If it chooses to downsize its capacity, NoFats annual lease cost for plant machinery will decrease to 9,000. Therefore, Allyson must choose between these two alternatives: Accept the special sales offer each year and earn a 10,000 relevant profit for each of the next 5 years or reject the special sales offer and downsize as described above. Assume that NoFat pays for all costs with cash. Also, assume a 10% discount rate, a 5-year time horizon, and all cash flows occur at the end of the year. Using an NPV approach to discount future cash flows to present value, a. Calculate the NPV of accepting the special sale with the assumed positive relevant profit of 10,000 per year (i.e., the special sales alternative). b. Calculate the NPV of downsizing capacity as previously described (i.e., the downsizing alternative). c. Based on the NPV of Requirements 5a and 5b, identify and explain which of these two alternatives is best for NoFat to pursue in the long term.
- Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Cutrate Furniture approached Jansen about buying 1,200 shelves for bookcases it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shell. The $1.50 per-shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320.000. However, the $130 packaging cost will not apply in this case. The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jansen accepts the special order? A. Profits will decrease by $1,200. B. Profits will increase by $31,200. C. Profits will increase by $600. D. Profits will increase by $7,200.Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the economic order quantity. 2. Compute the ordering, carrying, and total costs for the EOQ. 3. How much money does using the EOQ policy save the company over the policy of purchasing 4,000 plastic housing units per order?Quality Clothing, Inc., produces skorts and jumper uniforms for schoolchildren. In the process of cutting out the cloth pieces for each product, a certain amount of scrap cloth is produced. Quality has been selling this cloth scrap to Jorges Scrap Warehouse for $3.25 per pound. Last year, the company sold 40,000 lb. of scrap, which would be enough to make 10,000 teddy bears that the management of Quality is now interested in producing. Their processes would need some reprogramming, particularly in the cutting and stitching processes, but it would require no additional worker training. However, new packaging would be needed. The total variable cost to produce the teddy bears $3.85. Fixed costs would increase by $95,000 per year for the lease of the packaging equipment and Quality estimates it could produce and sell 10,000 teddy bears per year. Finished teddy bears could be sold for $18.00 each. Should Quality continue to sell the scrap cloth or should Quality process the scrap into teddy bears to sell?
- Cinnamon Depot bakes and sells cinnamon rolls for $1.75 each. The cost of producing 500,000 rolls in the prior year was: At the start of the current year, Cinnamon Depot received a special order for 18,000 rolls to be sold for $1.50 per roll. The company estimates it will incur an additional $1,000 in total fixed costs in order to lease a special machine that forms the rolls in the shape of a heart per the customers request. This order will not affect any of its other operations. Should the company accept the special order? (Show your work.)This year, Hassell Company will ship 4,000,000 pounds of chocolates to customers with total order-filling costs of 900,000. There are two types of customers: those who order 50,000 pound lots (small customers) and those who order 250,000 pound lots (large customers). Each customer category is responsible for buying 1,500,000 pounds. The selling price per pound is 2 per lb for the 50,000 pound lot and 3 per lb for the larger lots, due to differences in the type of chocolate. ABC would likely assign order-filling costs to the customer type as follows: a. 450,000, small; 450,000, large (using pounds as the driver) b. 360,000, small; 540,000, large (using revenue as the driver) c. 750,000, small; 150,000, large (using number of orders as the driver) d. 450,000, small; 450,000, large (using customer type as the driver)Taylor Company produces two industrial cleansers that use the same liquid chemical input: Pocolimpio and Maslimpio. Pocolimpio uses two quarts of the chemical for every unit produced, and Maslimpio uses five quarts. Currently, Taylor has 6,000 quarts of the material in inventory. All of the material is imported. For the coming year, Taylor plans to import 6,000 quarts to produce 1,000 units of Pocolimpio and 2,000 units of Maslimpio. The detail of each products unit contribution margin is as follows: Taylor Company has received word that the source of the material has been shut down by embargo. Consequently, the company will not be able to import the 6,000 quarts it planned to use in the coming years production. There is no other source of the material. Required: 1. Compute the total contribution margin that the company would earn if it could import the 6,000 quarts of the material. 2. Determine the optimal usage of the companys inventory of 6,000 quarts of the material. Compute the total contribution margin for the product mix that you recommend. 3. Assume that Pocolimpio uses three direct labor hours for every unit produced and that Maslimpio uses two hours. A total of 6,000 direct labor hours is available for the coming year. a. Formulate the linear programming problem faced by Taylor Company. To do so, you must derive mathematical expressions for the objective function and for the materials and labor constraints. b. Solve the linear programming problem using the graphical approach. c. Compute the total contribution margin produced by the optimal mix.