Practice 1: D& F., Inc. has developed a new product, the Number Cruncher 2000 to add to its ever-expanding offerings. After doing market research, it has determined that customers would be willing to pay $140 for the NC2000. D&F seeks to earn 25% profit on the product. At present, D&F makes a similar, old style model (The NC1000) for $101.25, which sells for $130. What must the target cost be in order to earn the 25% profit that the company demands? If D&F can adjust its costs to the target cost, the company estimates that it can sell 50,000 NC2000s. What would D&F’s profit be at this point? How many of the old style NC1000s would have to be sold to reach the same profit? D&F’s head of manufacturing operations is sensitive to the attainability of the cost projections in number 1 above. He has been analyzing the production process to determine how long it takes for one of its NC1000, or NC2000 products to pass through the process. The following information was assembled regarding how many days the product spends in various production activities: ActivityNumber of daysInspection 12Storage14Assembly8Handling6Painting8Packaging4 Which of the above activities are value-added activities? Identify one non-value-added activity and provide one suggestion that might reduce time spent on that activity. Practice 1:D. & F., Inc. has developed a new product, the Number Cruncher 2000 to add to its everexpanding offerings. After doing market research, it has determined that customers would bewilling to pay $140 for the NC2000. D&F seeks to earn 25% profit on the product. Atpresent, D&F makes a similar, old style model (The NC1000) for $101.25, which sells for$130(1.) What must the target cost be in order to earn the 25 % profit that the companydemands?(2.) If D&F can adjust its costs to the target cost, the company estimates that it can sell50,000 NC2000s. What would D&F's profit be at this point?(3.) How many of the old style NC1000s would have to be sold to reach the same profit?(4.) D&F's head of manufacturing operations is sensitive to the attainability of the costprojections in number 1 above. He has been analyzing the production process to.determine how long it takes for one of its NC1000, or NC2000 products to passthrough the process. The following information was assembled regarding how manydays the product spends in various production activities:ActivityInspectionStorageAssemblyHandlingPaintingPackagingNumber of days12148684(a) Which of the above activities are value-added activities?(b) Identify one non-value-added activity and provide one suggestion that mightreduce time spent on that activity

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Practice 1: D. & F., Inc. has developed a new product, the Number Cruncher 2000 to add to its ever expanding offerings. After doing market research, it has determined that customers would be willing to pay $140 for the NC2000. D&F seeks to earn 25% profit on the product. At present, D&F makes a similar, old style model (The NC1000) for $101.25, which sells for $130 (1.) What must the target cost be in order to earn the 25 % profit that the company demands? (2.) If D&F can adjust its costs to the target cost, the company estimates that it can sell 50,000 NC2000s. What would D&F's profit be at this point? (3.) How many of the old style NC1000s would have to be sold to reach the same profit? (4.) D&F's head of manufacturing operations is sensitive to the attainability of the cost projections in number 1 above. He has been analyzing the production process to. determine how long it takes for one of its NC1000, or NC2000 products to pass through the process. The following information was assembled regarding how many days the product spends in various production activities: Activity Inspection Storage Assembly Handling Painting Packaging Number of days 12 14 8 6 8 4 (a) Which of the above activities are value-added activities? (b) Identify one non-value-added activity and provide one suggestion that might reduce time spent on that activity

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 8EB: Shonda & Shonda is a company that does land surveys and engineering consulting. They have an...

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Practice 1:

D& F., Inc. has developed a new product, the Number Cruncher 2000 to add to its ever-expanding offerings. After doing market research, it has determined that customers would be willing to pay $140 for the NC2000. D&F seeks to earn 25% profit on the product. At present, D&F makes a similar, old style model (The NC1000) for $101.25, which sells for $130.

What must the target cost be in order to earn the 25% profit that the company demands?

If D&F can adjust its costs to the target cost, the company estimates that it can sell 50,000 NC2000s. What would D&F’s profit be at this point?

How many of the old style NC1000s would have to be sold to reach the same profit?

D&F’s head of manufacturing operations is sensitive to the attainability of the cost projections in number 1 above. He has been analyzing the production process to determine how long it takes for one of its NC1000, or NC2000 products to pass through the process. The following information was assembled regarding how many days the product spends in various production activities:

Activity	Number of days
Inspection	12
Storage	14
Assembly	8
Handling	6
Painting	8
Packaging	4

Which of the above activities are value-added activities?

Identify one non-value-added activity and provide one suggestion that might reduce time spent on that activity.

Practice 1:
D. & F., Inc. has developed a new product, the Number Cruncher 2000 to add to its ever
expanding offerings. After doing market research, it has determined that customers would be
willing to pay $140 for the NC2000. D&F seeks to earn 25% profit on the product. At
present, D&F makes a similar, old style model (The NC1000) for $101.25, which sells for
$130
(1.) What must the target cost be in order to earn the 25 % profit that the company
demands?
(2.) If D&F can adjust its costs to the target cost, the company estimates that it can sell
50,000 NC2000s. What would D&F's profit be at this point?
(3.) How many of the old style NC1000s would have to be sold to reach the same profit?
(4.) D&F's head of manufacturing operations is sensitive to the attainability of the cost
projections in number 1 above. He has been analyzing the production process to.
determine how long it takes for one of its NC1000, or NC2000 products to pass
through the process. The following information was assembled regarding how many
days the product spends in various production activities:
Activity
Inspection
Storage
Assembly
Handling
Painting
Packaging
Number of days
12
14
8
6
8
4
(a) Which of the above activities are value-added activities?
(b) Identify one non-value-added activity and provide one suggestion that might
reduce time spent on that activity

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