The banker has suggested that Greg can reduce his fixed costs by $150,000 if he will not buy any vehicles.  Greg can instead rent vehicles as needed.  The variable cost of renting is $700 per family served.  Will this suggestion help Greg reach the break-even point sooner?

Q: Assume that HASF  furniture Inc., as described, currently purchases the chair cushions for its lawn…

A: The companies make their make or buy decisions based on comparative analysis of total costs incurred…

Q: Kathleen Taylor is a high school student who has been investigating the possibility of mowing lawns…

A: The cost volume profit analysis or CVP analysis is used for the purpose of determining the effect on…

Q: Assume that HASF  furniture Inc., as described, currently purchases the chair cushions for its lawn…

A: Assume that HASF  furniture Inc., as described, currently purchases the chair cushions for its lawn…

Q: A restaurant owner is trying to decide between two different garbage disposals. A regular steel (RS)…

A: Regular Steel Initial Cost = 3500 N = 4 years Maintenance Cost at end of second year = 100…

Q: Angelus Press is considering replacing all of its old cash registers with new ones. The old…

A: Note: Hi! Thank you for the question, As per the honor code, we are allowed to answer three…

Q: Mimi's Fixtures manufactures kitchen tiles in one plant, which has a practical capacity of 30,000…

A: Cost: Cost is the summation of all expenditures which is related to the conversion of raw material…

Q: “I’m not sure we should lay out $315,000 for that automated welding machine,” said Jim Alder,…

A: Since we only answer up to 3 sub-parts, we’ll answer the parts 1, 2a and 2b of this question. Please…

Q: The Knot manufactures men’s neckwear at its Spartanburg plant. The Knot is considering implementing…

A: Just-in-time (JIT) manufacturing system:   Just-in-time manufacturing system is an approach to…

Q: Camille Company operates a chain of retail paint stores. Although the paint is sold under the…

A: Contribution margin per gallon =Selling price per gallon -Variable cost per gallon=P 100 -P 70=P…

Q: I’m not sure we should lay out $265,000 for that automated welding machine,” said Jim Alder,…

A: 1) Particular Amount ($) Reduction in labor costs 105,000 Reduction in material waste 6,600…

Q: Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For…

A: “Since you have asked multiple questions, we will solve the first three sub-parts question for you.…

Q: 1.  Compute the payback period for the new equipment. Round your answer to two decimal places. fill…

A: Payback period is the period within which the sum invested by the company in a project will be…

Q: Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For…

A: 4. Following are the computation of customer margin earned:

Q: Alderon Enterprises is evaluating a special order it has received for a ceramic fixture to be used…

A: Definition: Cost: The amount paid to purchase the asset, install it, and put it into operations, is…

Q: "In my opinion, we ought to stop making our own drums and accept that outside supplier's offer,"…

A: Financial Advantage/(Disadvantage)=Total relevant cost of making-Cost of purchase

Q: Tate Inc. and Booth Inc. are two small manufacturing companies that are considering leasing a…

A:

Q: A dress manufacturer, Prissy Candy, has fallen on hard times and wants to break-even with it's most…

A: Break even = Fixed cost / Contribution per unit Contribution per unit = Selling price - Variable…

Q: Greg Morrison recently graduated from mortuary school.  He is considering opening his own funeral…

A: Break-Even Point: It is the point where the company is at zero profit. It is where the company is…

Q: Paul White is a young entrepreneur preparing to start a company that will sell floating lounge…

A: Formula: Units to be sold = ( Target profit + Fixed costs ) / contribution margin per unit…

Q: I’m not sure we should lay out $355,000 for that automated welding machine,” said Jim Alder,…

A: In finance, the net present value (NPV)  applies to an arrangement of cash flows happening at…

Q: Waterways has discovered that a small fitting it now manufactures at a cost of $1.00 per unit could…

A: Make cost is the cost to produce the product. Buy cost is the cost of purchasing or buying the…

Q: Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For…

A: Manufacturing overhead: It is the indirect cost incurred as a part of manufacturing the products.…

Q: he wishes to know what the annual cost, at the economic life, will be for a van with the following…

A: The annual cost analysis helps an organization to evaluate the life cycle of a project.   The…

Q: Greg Morrison recently graduated from mortuary school.  He is considering opening his own funeral…

A: Contribution is - Sales - Variables Cost Contribution = $ 6000- $ 1200- $ 4800

Q: Tate Inc. and Booth Inc. are two small manufacturing companies that are considering leasing a…

A:

Q: Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For…

A: Activity based costing (ABC) is the costing method which allocates the overheads on the basis of…

Q: Natalie is thinking of buying a van that will be used only for business. The cost of the van is…

A: since you have posted question with multiple sub parts. we will be solving  first three subparts for…

Q: The Knot manufactures men’s neckwear at its Spartanburg plant. The Knot is considering implementing…

A: JIT or just-in-time is a stock administration technique in which material, labor and products (to be…

Q: Janelle Heinke, the owner of Ha'Peppas!, is considering a new oven in which to bake the firm's…

A: Variable cost means the cost which vary with the level of output and fixed cost means the cost which…

Q: You are trying to pick the least-expensive equipment for your manufacturing  operations. You have…

A: It is the annual cost of owning and maintaining the asset which is determined by dividing the net…

Q: Juanita is planning to make fancy, multi-tiered wedding cakes for the next wedding season. To make…

A: The contribution margin is the total amount of profits and fixed costs for an entity which is used…

Q: You are trying to pick the least-expensive equipment for your manufacturing operations. You have two…

A: Cost of capital = 10% Year Hi-Quality CFs Lo-Quality CFs 0  $   -40,000.00  $   -20,000.00 1…

Q: Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For…

A: Note: Since we are entitled to answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit…

Q: Natalie is also thinking of buying a van that will be used only for business. The cost of the van is…

A: Depreciation is a charge on the asset. It means that portion of asset has been used during the year.…

Q: You are trying to pick the least-expensive equipment for your manufacturing operations. You have two…

A: To take the valuing decision between the two alternatives that have a different useful life, it is…

Q: The Knot manufactures men’s neckwear at its Spartanburg plant. The Knot is considering implementing…

A:

Q: Natalie is thinking of buying a van that will be used only for business. The cost of the van is…

A: Depreciation means decline in the estimation of benefit inside its valuable life because of mileage…

Q: The management of a private hospital is considering automating some back office functions. This…

A: Net Present Value (NPV) refers to the difference between the present value of cash inflows and cash…

Q: A new restaurant has recently opened in your community and it is a huge success with an average of…

A: In order to make a decision about whether or not to purchase the dish-washing machine, we need to…

Q: The management of a private hospital is considering the installation of an automatic telephone…

A: Ans: If the company removes the current system of operation the amount it can save per annum can be…

Q: Dr. Gulakowicz is an orthodontist. She estimates that adding two new chairs will increase fixed…

A: The Break-even point indicates the level of sales where the total cost is equal to total sales. It…

Q: "In my opinion, we ought to stop making our own drums and accept that outside supplier's offer,"…

A: In make or buy decision we evaluate both costs , making in our own plant and buying from…

Q: Waterways has discovered that a small fitting it now manufactures at a unit cost of $1.00 could be…

A: Working Note: Purchasing Cost = No. of units needed x Purchasing Cost per unit = 465,000 units x…

Q: Assume that HASF  furniture Inc., as described, currently purchases the chair cushions for its lawn…

A: Assume that HASF  furniture Inc., as described, currently purchases the chair cushions for its lawn…

Q: “I’m not sure we should lay out $375,000 for that automated welding machine,” said Jim Alder,…

A: Net Present Value: It refers to the excess of the present value of inflows over the present value of…

Q: Kobe Company has manufactured 200 partially finished cabinets at a cost of $102,000. These can be…

A: Incremental income = Incremental Sales revenue – Incremental costs

Q: Greg Morrison recently graduated from mortuary school. He is considering opening his own funeral…

A:

Q: Waterways has discovered that a small fitting it now manufactures at a unit cost of $1.00 could be…

A: Opportunity cost refers to that cost which is saved in case one alternative is selected over the…

Q: Mighty Safe Fire Alarm is currently buying 57,000 motherboards from MotherBoard, Inc. at a price of…

A: Comparing the cost in both cases i.e buy and make and whose cost is less and increase the profit…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.