Problem 10Valdez Motors Co. makes motorcycles. Management wants tooverhead costs to plan its operations. A recent trade publication revealed thatoverhead costs tend to vary with machine hours. To check this, they collected thefollowing data for the past 12 months.estimateOverhead CostsP 4,5004,2254,3215,2504,8005,1004,4504,2005,4754,7604,3253,975Month No.Machine Hours17517031604190517520016071509210101801117012145Requirements1. Use the high-low method to estimate the fixed and variable portion ofoverhead costs based on machine hours.2. If the plant is planning to operate at a level of 200 machine hours nextperiod, what would be the estimated overhead costs?3. Use the method of least square to estimate the fixed and variable portion ofoverhead costs based on machine hours.

Answered: Image /qna-images/answer/ec8f5e6d-263a-4e2f-9863-d982fddb497e.jpg

Answered: Requirements 1. Use the high-low method…

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. Is Ben Gibson acting legally? Is he acting ethically? Why or why not?
Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?
Basil's Framing manufactures picture frames in one workshop, which has a practical capacity of 40,000 frames. The variable cost of a frame is $24 per unit, and the fixed costs of the workshop are $392,000 annually. Current annual demand is 28,000 frames. Basil's Framing bought the current workshop because of forecasts that demand for the frames would grow. Required: a. What cost per frame should the cost system report to facilitate management decision making?
Charles Lackey operates a bakery in Idaho Falls,Idaho. Because of its excellent product and excellent loca-tion, demand has increased by 25% in the last year. On far toomany occasions, customers have not been able to purchasethe bread of their choice. Because of the size of the store, nonew ovens can be added. At a staff meeting, one employeesuggested ways to load the ovens differently so that moreloaves of bread can be baked at one time. This new processwill require that the ovens be loaded by hand, requiring addi-tional manpower. This is the only thing to be changed. If thebakery makes 1,500 loaves per month with a labor produc-tivity of 2.344 loaves per labor-hour, how many workers willLackey need to add? (Hint: Each worker works 160 hours permonth.)
PROBLEM-3) The Sales&Operations (S&OP) process is designed to produce a plan that all departmentswithin the organization, as well as suppliers to the organization, can work. The process is also sometimes referred toas sales, inventory, and operations planning (SIOP) to emphasize the important role that inventory can play as abuffer between sales planning and operations planning. The S&OP department of the XYZ company, that producesKLM products, estimates the sales over the next six years in thousands of packages will be as follows: Assume that each worker stays on the job for at least one year and XYZ currently has eight workers. XYZ estimatesthat they will have 600000 packages on hand at the end of the current year. Assume that, on average, eachworker is paid TL 60000 per year and is responsible for producing 80000 packages. Inventory costs have beenestimated to be 20 KRS per package per year, and shortages are not allowed. XYZ estimates that it costs TL 2500for each…
12. Zan Azlett and Angela Zesiger have joined forces to start A&Z Lettuce Products, a processor of packaged shredded lettuce for institutional use. Zan has years of food processing experience, and Angela has extensive commercial food preparation experience. The process will consist of opening crates of lettuce and then sorting, washing, slicing, preserving, and finally packaging the prepared lettuce. Together, with help from vendors, they think they can adequately estimate demand, fixed costs, revenues, and variable cost per bag of lettuce. They think a largely manual process will have monthly fixed costs of $36,000 and variable costs of $1.75 per bag. A more mechanized process will have fixed costs of $72,000 per month with variable costs of $1.25 per bag. They expect to sell the shredded lettuce for $2.75 per bag. Part 2 a) The break-even quantity in units for the manual process = ______ bags (round your response to the nearest whole number). b) The revenue for…
Tyrene Products manufactures recreational equipment. One of the company’s products, a skate-board, sells for $37.50. The skateboards are manufactured in an antiquated plant that relies heavily on direct labor workers. Thus, variable costs are high, totaling $22.50 per skateboard of which60% is direct labor cost.Over the past year the company sold 40,000 skateboards, with the following operating results: Sales (40,000 skateboards) $1,500,000 Variable expenses 900,000 Contribution margin 600,000 Fixed expenses 480,000 Net operating income $ 120,000 Management is anxious to maintain and perhaps even improve its present level of income from theskateboards. Required: 1. Compute ( a ) the CM ratio and the break-even point in skateboards, and ( b ) the degree of oper-ating leverage at last year’s level of sales. 2. Due to an increase in labor rates, the company estimates that variable costs will increase by$3 per skateboard next year. If this change takes place and the selling…
Dart is a product of the Digby company. Digby's sales forecast for Dart is 2067 units. Digby wants to have an extra 10% of units on hand above and beyond their forecast in case sales are better than expected. (They would risk the possibility of excess inventory carrying charges rather than risk lost profits on a stock out.) Taking current inventory into account, what will Dart's Production After Adjustment have to be in order to have a 10% reserve of units available for sale? a. 2053 units b. 2274 units c. 2260 units d. 2067 units
1. Foxie Owl’s Besty Bagel shop makes fresh bagels. She has to buy raw materials fresh every day for selling on that day. She wants to know exactly how much should she spend on raw materials. Foxie did some analysis over the past month and came back with the following numbers: Daily demand was equally likely to be 200, 225, 250, 275, or 300 bagels. What should be the number of bagels on hand to satisfy a Fill Rate requirement of 96%, rounded to next integer value? Group of answer choices 300 275 286 263 2. Suppose that instead of a discrete demand distribution, Foxie’s shop determines that the daily demand for bagels is normally distributed, with a mean of 250 and a standard deviation of 35. Foxie still wants a Fill Rate of 98%. What is the appropriate level of on-hand inventory for Foxie’s shop? Group of answer choices 263 274 257 270
1.The managers of Kai’s Catering want to increase the number of events booked by 20%. To accomplish this, a(n) ________ was established to include clear weekly targets for number of deposits received. Multiple Choice means-end chain operating plan strategic plan scenario analysis 2. Prior to Apple’s debut of the iPhone, Microsoft was also working on a revolutionary smart phone. Microsoft was already one of the world’s leading technology companies with thousands of engineers and designers with hundreds of millions of dollars for their R&D budget. Despite having a solid strategy and adequate resources, Microsoft derailed cross-departmental cooperation, perpetuated unhealthy competition among its employees, and ultimately Multiple Choice closed the business due to a labor strike. failed to implement its strategy. developed a competitive advantage in smart phones. fired Bill Gates. 3. You receive a memo that reads as follows: “In recent months, our customer evaluations have…
On August, a light business bought $3600 worth of lamps. At the beginning of September, the store had $1400 in lights on hand, and by the end of September, it projected to have $1600 in lamps on hand to meet some of the forecasted October sales. And what's the August planned cost of goods sold?
Emarpy Appliance is a company that produces all kinds of major appliances. Bud Banis, the presidentof Emarpy, is concerned about the production policy for thecompany’s best-selling refrigerator. The annual demand hasbeen about 8,000 units each year, and this demand has beenconstant throughout the year. The production capacity is 200units per day. Each time production starts, it costs the company $120 to move materials into place, reset the assemblyline, and clean the equipment. The holding cost of a refrigerator is $50 per year. The current production plan calls for 400refrigerators to be produced in each production run. Assumethere are 250 working days per year.a) What is the daily demand of this product?b) If the company were to continue to produce 400 units eachtime production starts, how many days would productioncontinue?c) Under the current policy, how many production runs peryear would be required? What would the annual setup costbe?d) If the current policy continues, how many…

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