Operating department managers will only use an external provider of material-handing services if it costs more than the variable rate cost per hour (S40 in ou under the dual-rate method. By charging the fixed costs of resources budgeted to be used by the operating departments as a lump sum, the dual-rate method succeeds in removing fixed The dual-rate method guides department managers to make decisions that benefit both the organization as a whole and each department because it signals t Operating department managers will only use an external provider of material-handling services if it costs less than the variable rate cost per hour (520 in our under the single-rate method. Allocating fixed costs based on budgeted usage helps user departments with both short-run and long-run planning because user departments know the costs planning horizon; budgeted usage measures the long-run demands of the user departments for support-department services. By charging the fixed costs of resources budgeted to be used by the operating departments as a lump sum, the dual-rate method succeeds in removing varial

Operating department managers will only use an external provider of material-handing services if it costs more than the variable rate cost per hour (S40 in ou under the dual-rate method. By charging the fixed costs of resources budgeted to be used by the operating departments as a lump sum, the dual-rate method succeeds in removing fixed The dual-rate method guides department managers to make decisions that benefit both the organization as a whole and each department because it signals t Operating department managers will only use an external provider of material-handling services if it costs less than the variable rate cost per hour (520 in our under the single-rate method. Allocating fixed costs based on budgeted usage helps user departments with both short-run and long-run planning because user departments know the costs planning horizon; budgeted usage measures the long-run demands of the user departments for support-department services. By charging the fixed costs of resources budgeted to be used by the operating departments as a lump sum, the dual-rate method succeeds in removing varial

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter11: Linear Optimization Models

Section: Chapter Questions

Problem 10P: The management of Hartman Company is trying to determine the amount of each of two products to...

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Young Company is beginning operations and is considering three alternatives to allocate manufacturing overhead to individual units produced. Young can use a plantwide rate, departmental rates, or activity-based costing. Young will produce many types of products in its single plant, and not all products will be processed through all departments. In which one of the following independent situations would reported net income for the first year be the same regardless of which overhead allocation method had been selected? a. All production costs approach those costs that were budgeted. b. The sales mix does not vary from the mix that was budgeted. c. All manufacturing overhead is a fixed cost. d. All ending inventory balances are zero.
Hudson Corporation is considering three options for managing its data warehouse: continuing with its own staff, hiring an outside vendor to do the managing, or using a combination of its own staff and an outside vendor. The cost of the operation depends on future demand. The annual cost of each option (in thousands of dollars) depends on demand as follows: If the demand probabilities are 0.2, 0.5, and 0.3, which decision alternative will minimize the expected cost of the data warehouse? What is the expected annual cost associated with that recommendation? Construct a risk profile for the optimal decision in part (a). What is the probability of the cost exceeding $700,000?
Iliff, Inc., produces and sells two types of countertop ovensthe toaster oven and the convection oven. Budgeted and actual data for the two models are shown below. Budgeted Amounts: Actual Amounts: Required: 1. Calculate the budgeted average unit contribution margin. 2. Calculate the contribution margin variance. 3. What if actual units sold of the convection oven decreased? How would that affect the contribution margin variance? What if actual units sold of the convection oven increased? How would that affect the contribution margin variance?
QRC Company is trying to decide which one of two alternatives it will accept. The costs and revenues associated with each alternative are listed below: Alternative A Alternative B Projected revenue $ 125,000 $ 150,000 Unit-level costs 25,000 36,000 Batch-level costs 12,500 24,000 Product-level costs 15,000 17,000 Facility-level costs 10,000 12,500 What is the differential revenue for this decision? Multiple Choice $50,000 $25,000 $125,000 $150,000
Requirement 1. Compute the budgeted fixed manufacturing overhead rate per barrel for each of the denominator-level capacity concepts. Explain why they are different. Begin by determing the formula to calculate the budgeted fixed manufacturing overhead rate per barrel, then compute the rate for each of the denominator-level capacity concepts. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
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As manager of the St. Cloud Theatre Company,you have decided that concession sales will support themselves.The following table provides the information you have been ableto put together thus far:ITEM SELLING PRICE VARIABLE COST % OF REVENUESoft drink $1.00 $.65 25Wine 1.75 .95 25Coffee 1.00 .30 30Candy 1.00 .30 20Last year’s manager, Jim Freeland, has advised you to be sureto add 10% of variable cost as a waste allowance for all categories.You estimate labor cost to be $250.00 (5 booths with 2 peopleeach). Even if nothing is sold, your labor cost will be $250.00, soyou decide to consider this a fixed cost. Booth rental, which is acontractual cost at $50.00 for each booth per night, is also a fixedcost.a) What is the break-even volume per evening performance?b) How much wine would you expect to sell each evening at thebreak-even point?
Materials used by Best Bread Company in producing Division A's product are currently purchased from outside suppliers at a cost of $30 per unit. However, the same materials are available from Division B. Division B has unused capacity and can produce the materials needed by Division A at a variable cost of $20 per unit. If the negotiated price approach is used, what would be the range of acceptable transfer prices?
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Zarson’s Netballs is a manufacturer of high-quality basketballs and volleyballs. Setup costs are driven by the number of setups. Equipment and maintenance costs increase with the number of machine-hours, and lease rent is paid per square foot. Capacity of the facility is 14,000 square feet, and Zarson is using only 80% of this capacity. Required. Zarson records the cost of unused capacity as a separate line item and not as a product cost. The following is the budgeted information for Zarson:(RESOURCE IN PICTURE ATTATCHED) Q.What is the budgeted cost of unused capacity?
Zarson’s Netballs is a manufacturer of high-quality basketballs and volleyballs. Setup costs are driven by the number of setups. Equipment and maintenance costs increase with the number of machine-hours, and lease rent is paid per square foot. Capacity of the facility is 14,000 square feet, and Zarson is using only 80% of this capacity. Required. Zarson records the cost of unused capacity as a separate line item and not as a product cost. The following is the budgeted information for Zarson:(RESOURCE IN PICTURE ATTATCHED) Q. What is the budgeted total cost and the cost per unit of resources used to produce (a) basketballs and (b) volleyballs?