Sunblessed Juice Company sells bags of oranges and cartons of orange juice. Sunblessed grades oranges on a scale of 1 (poor) to 10 (excellent). At present, Sunblessed has 100,000 pounds of grade 9 oranges and 120,000 pounds of grade 6 oranges on hands. The average quality of oranges sold in bags must be at least 7, and the average quality of oranges used to produce orange juice must be 8. Each pound of oranges that is used for juice yields a revenue of $1.50 and incurs a variable cost (consisting of labor costs, variable overhead costs, inventory costs, and so on) of $1.05. Each pound of oranges sold in bags yields a revenue of $1.50 and incurs a variable cost of $0.70. Determine how Sunblessed can maximize its profit.

Sunblessed Juice Company sells bags of oranges and cartons of orange juice. Sunblessed grades oranges on a scale of 1 (poor) to 10 (excellent). At present, Sunblessed has 100,000 pounds of grade 9 oranges and 120,000 pounds of grade 6 oranges on hands. The average quality of oranges sold in bags must be at least 7, and the average quality of oranges used to produce orange juice must be 8. Each pound of oranges that is used for juice yields a revenue of $1.50 and incurs a variable cost (consisting of labor costs, variable overhead costs, inventory costs, and so on) of $1.05. Each pound of oranges sold in bags yields a revenue of $1.50 and incurs a variable cost of $0.70. Determine how Sunblessed can maximize its profit.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter9: Standard Costing: A Functional-based Control Approach

Section: Chapter Questions

Problem 9CE: Mangia Pizza Company makes frozen pizzas that are sold through grocery stores. Mangia developed the...

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Please use attached spreadsheet and show full steps Sunblessed Juice Company sells bags of oranges and cartons of orange juice. Sunblessed grades oranges on a scale of 1 (poor) to 10 (excellent). At present, Sunblessed has 220,000 pounds of grade 6 oranges and 150,000 pounds of grade 9 oranges on hand. The aver- age quality of oranges sold in bags must be at least 7, and the average quality of the oranges used to produce orange juice must be at least 8. Each pound of oranges that is used for juice yields a revenue of $2.25 and in- curs a variable cost (consisting of labor costs, variable overhead costs, inventory costs, and so on) of $1.35. Each pound of oranges sold in bags yields a revenue of $2.00 and incurs a variable cost of $1.20. a. Determine how Sunblessed can maximize its profit. b. Use SolverTable to determine how a change in the cost per bag of oranges changes the optimal solution. c. Use SolverTable to determine how a change in the amount of grade 6 oranges…
I need help with parts 3 and 4. See attachements below for template. Sunblessed Juice Company sells bags of oranges and cartons of orange juice. Sunblessed grades oranges on a scale of 1 (poor) to 10 (excellent). At present, Sunblessed has 100,000 pounds of grade 9 oranges and 120,000 pounds of grade 6 oranges on hand. The average quality of oranges sold in bags must be at least 7, and the average quality of the oranges used to produce orange juice must be at least 8. Each pound of oranges that is used for juice yields a revenue of $1.50 and incurs a variable cost (consisting of labor costs, variable overhead costs, inventory costs, and so on) of $1.05. Each pound of oranges sold in bags yields a revenue of $1.50 and incurs a variable cost of $0.70. Determine how Sunblessed can maximize its profit. Use SolverTable to determine how a change in the cost per bag of oranges changes the optimal solution. Use SolverTable to determine how a change in the amount of grade 9 oranges available…
Bart’s Butters receives 1,000,000 containers of raw milk each period that it subsequently processes into consumable milk by adjusting the fat content, adding vitamins, and destroying any potentially harmful bacteria. For Bart’s, one container equals one gallon of consumable milk. Bart’s then must decide whether to sell its consumable milk at split-off or to process it further into butter. Bart’s normally sells consumable milk for a per-gallon price of $3. Alternately, each gallon of milk can be processed further into one-half tub of butter (i.e., one gallon of milk equals 0.5 gallon of butter) at an additional cost of $1.50 per tub of butter. Also, butter can be sold for $6.00 per tub. What is the contribution to income from processing the consumable milk into butter?
Bart’s Butters receives 1,000,000 containers of raw milk each period that it subsequently processes into consumable milk by adjusting the fat content, adding vitamins, and destroying any potentially harmful bacteria. For Bart’s, one container equals one gallon of consumable milk. Bart’s then must decide whether to sell its consumable milk at split-off or to process it further into butter. Bart’s normally sells consumable milk for a per-gallon price of $3. Alternately, each gallon of milk can be processed further into one-half tub of butter (i.e., one gallon of milk equals 0.5 gallon of butter) at an additional cost of $1.50 per tub of butter. Also, butter can be sold for $6.00 per tub. Required: 1. What is the contribution to income from selling the consumable milk?$fill in the blank 1 2. What is the contribution to income from processing the consumable milk into butter?$fill in the blank 2
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Kaune Food Products Company manufactures canned mixed nuts with an average manufacturing cost of 52 per case (a case contains 24 cans of nuts). Kaune sold 150,000 cases last year to the following three classes of customer: The supermarkets require special labeling on each can costing 0.04 per can. They order through electronic data interchange (EDI), which costs Kaune about 61,000 annually in operating expenses and depreciation. Kaune delivers the nuts to the stores and stocks them on the shelves. This distribution costs 45,000 per year. The small grocers order in smaller lots that require special picking and packing in the factory; the special handling adds 25 to the cost of each case sold. Sales commissions to the independent jobbers who sell Kaune products to the grocers average 8 percent of sales. Bad debts expense amounts to 9 percent of sales. Convenience stores also require special handling that costs 30 per case. In addition, Kaune is required to co-pay advertising costs with the convenience stores at a cost of 15,000 per year. Frequent stops are made to each convenience store by Kaune delivery trucks at a cost of 30,000 per year. Required: 1. Calculate the total cost per case for each of the three customer classes. (Round unit costs to four significant digits.) 2. Using the costs from Requirement 1, calculate the profit per case per customer class. Does the cost analysis support the charging of different prices? Why or why not? 3. What if Kaune charged the average price per case to all customer classes? How would that affect the profit percentages?
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?
Mangia Pizza Company makes frozen pizzas that are sold through grocery stores. Mangia developed the following standard mix for spreading on premade pizza shells to produce 16 giant-size sausage pizzas. Mangia put a batch of 2,000 pounds of direct materials (enough for 800 frozen sausage pizzas) into process. Of the total, 700 pounds were tomato sauce, 840 pounds were cheese, and the remaining 460 pounds were sausage. The actual yield was 780 pizzas. Required: 1. Calculate the standard mix (SM) in pounds for tomato sauce, for cheese, and for sausage. 2. Calculate the mix variance. 3. Calculate the actual proportion used of tomato sauce, cheese, and sausage. Use these results to explain the direction (favorable or unfavorable) of the mix variance. 4. What if of the total 2,000 pounds of ingredients put into process, 700 pounds were tomato sauce, 700 pounds were cheese, and 600 pounds were sausage? How would that affect the mix variance?
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.
Zuzu is a large manufacturer of snack cakes. The company operates distribution centers in Chicago. The distribution center bakes and packages the snack cakes and ships them to grocery warehouses throughout the country. Because of the high standards set for both quality and appearance, there is a reasonable number of “seconds” that do not meet standards and are sold to company outlets for sale at reduced prices. In recent years, the company’s average yield has been 90% of first-quality products for sale to grocery warehouses. The remaining 10% is sent to the outlet store. Zuzu’s performance-evaluation system pays its distribution center managers substantial bonuses if the company achieves annual budgeted profit numbers. In the last quarter of 2017, Noah Spalding, Zuzu’s controller, noted a significant increase in yield percentage of the Chicago distribution center, from 90% to 98%. This increase resulted in a 10% increase in the center’s profits. During a recent trip to the Chicago…
Zuzu is a large manufacturer of snack cakes. The company operates distribution centers in Chicago. The distribution center bakes and packages the snack cakes and ships them to grocery warehouses throughout the country. Because of the high standards set for both quality and appearance, there is a reasonable number of “seconds” that do not meet standards and are sold to company outlets for sale at reduced prices. In recent years, the company’s average yield has been 90% of first-quality products for sale to grocery warehouses. The remaining 10% is sent to the outlet store. Zuzu’s performance-evaluation system pays its distribution center managers substantial bonuses if the company achieves annual budgeted profit numbers. In the last quarter of 2017, Noah Spalding, Zuzu’s controller, noted a significant increase in yield percentage of the Chicago distribution center, from 90% to 98%. This increase resulted in a 10% increase in the center’s profits. During a recent trip to the Chicago…
Mishal LLC is a new startup in the retail manufacturing business of fruit juices. Their requirement for such business includes fruit pulp, preservatives, natural color and sugar. Annual requirement for fruit pulp is 1000 kg and for preservatives is 20 kg. Semi-annual requirement for natural color is 10 kg and monthly requirement of sugar is 50 kg. Carrying cost for all items is 8%. Buying cost per order for fruit pulp, preservatives, natural color and sugar is RO 10, RO 5, RO 3 and RO 1 respectively. Per unit cost for fruit pulp, preservatives, natural color and sugar is RO 1, RO 1.5, RO 1.2 and RO 0.2 respectively. For preservative, the Seller offers to give 10 % discount on unit price if quantity ordered is 50. What will be the ordering cost if seller option is considered a. 1 b. 5 c. 8 d. 2 What is the cost on material for preservative a. 6.8989 b. 40 c. 10.444 d. 4.8989 For natural color, the Seller offers to give 100 baisa discount on unit price if quantity ordered is 40. What…