The production department is proposing the purchase of an automatic insertion machine. It has identified three machines and has asked the accountant to analyze them to determine which one has the best average rate of return. Machine A Machine B Machine C Estimated average income $43,866.76 $73,406.10 $62,231.25 Average investment 313,334.00 244,687.00 414,875.00
Q: The manager of a division that produces add-on products for the automobile industry has just been…
A: Answer: Formula of ROI: ROI = Net Operating Income/Average Operating Assets Net Operating Income…
Q: Wilderness Products, Inc., has designed a self-inflating sleeping pad for use by backpackers and…
A: Manufacturing overhead costs are the total of all indirect costs incurred during the production of a…
Q: The production department is proposing the purchase of an automatic insertion machine. It has…
A: Payback period is the time required to recover the investment. Payback period = Initial…
Q: Tim's Corp. is considering whether to overhaul an older machine or buy a newer more efficient…
A: Net Present Value is the sum of the discounted value of the future expected cash flows. In this…
Q: A large company is considering changing all the light bulbs in their office buildings to new, more…
A: Return on Investment means the net income earned by an entity after making an investment in the…
Q: Larry's Shop has asked you to make a recommendation for an investment proposal they have been…
A: Net present value (NPV) refers to the difference between the present value of cash inflows from the…
Q: It has been decided that whole body scanning technology will be used for airport security purposes.…
A: Present worth(PW) method or Net Present value(NPV) is commonly used method to determine the best…
Q: You are a manager at Percolated Fiber, which is considering expanding its operations in synthetic…
A: Here, Cost of Capital is 10% Cost of the Equipment is $19,000,000 Working Capital is $7,000,000 Part…
Q: You are a manager at Percolated Fiber, which is considering expanding its operations in synthetic…
A: Net present value is the most important capital budgeting technique which helps in the decision…
Q: You are a manager at Percolated Fiber, which is considering expanding its operations in synthetic…
A: Introduction: Free cash flow (FCF) refers to the cash available with the company after bearing all…
Q: A manufacturing firm just received a shipment of 20 assembly parts, of slightly varied sizes, from a…
A: Given information, Total parts = 20 Suitable parts = 15 Non-suitable parts = total - suitable parts…
Q: 'ou are a manager at Northern Fibre, which is considering expanding its operations in synthetic…
A: Here, Cost of Project is $24 millions Net Income of Project is $4.732 million Depreciation is 2.400…
Q: This case study is a justification of a computer system for, the ABC Company. The following are…
A: ATCF are the net cash flows from which tax or income tax is subtracted.
Q: A new biomaterial used for prosthetic devices was developed by engineers in the laboratory that…
A:
Q: JigSaw Puzzle Company is a chain of 10 retail stores that sell puzzles. In order to more…
A: Following are the answers to the given questions
Q: The production department is proposing the purchase of an automatic insertion machine. It has…
A: Calculate the average rate of return as follows: Average rate of return = Average net income /…
Q: Туре A Туре В First cost P250,000 P350,000 Annual operating cost 30,000 22,000 Annual labor cost…
A: Purchasing department playing vital role in industry because it takes important decisions that which…
Q: XYZ Company has two divisions, the logistics division and foods division. Suppose that the foods…
A: Given, The amount invested is $10,000,000. Rate of return is 12%
Q: solve a and b based on data in the images provided. a.What are the minimum and maximum transfer…
A: AMP industries has two divisions. 1. Battery division 2. Auto division Battery division is in Canada…
Q: The quarrying cost of marble and granite blocks plus delivery cost to the processing plant each is…
A: The question is based on the concept of Cost Accounting.
Q: Classify the following type of cost with necessary reasons: 1.A company had paid 15,50,000 to a…
A: Cost which are created in the past and it cannot be easily changed by making any decision in the…
Q: "An industrial engineer proposed the purchase of an RFID Ford Asset Tracking System for the…
A: IRR is the minimum return required by an investor from any investment. For the acceptance of any…
Q: The production department is proposing the purchase of an automatic insertion machine. It has…
A: >Average rate of return is the return earned on average invested assets. >The ratio is…
Q: A process control manager is considering two robots to improve materials-handling capacity in the…
A: Robot X : First Cost = $ 74000 Annual M&O Cost = $ 31,000 Salvage Value = $ 35,000 Revenue…
Q: Suppose that you are the manager of a studio cafe, and you are planning to invest on a new camera…
A: Incremental revenues and costs are the difference between the current situation and projected sales…
Q: Wilderness Products, Inc., has designed a self-inflating sleeping pad for use by backpackers and…
A: Return on investment is the measure of efficiency of the investment. It determines the amount of…
Q: When considering which values to use in Investment Appraisal, only “Relevant Costs” are used. A…
A: Relevant costs are costs that affect the decision to be made for investment. If any cost do not…
Q: Tim Smunt has been asked to evaluate two machines. After some investigation, he determines that…
A: Introduction Net present value (NPV) is the term used to describe the difference between the…
Q: You need to select a machine for the robotized welding process at your factory. There are two…
A: The net present value is the difference between the present value of cash inflows and the present…
Q: In evaluating projects, LeadTech’s engineers use a rate of 15%. One year ago a robotic transfer…
A: EUAC stands for Equivalent Uniform Annual Cost. The annual uniform series of payment which can…
Q: The GeoStars Company, a leading wireless communication device manufacturer. is considering three…
A: Net Present Value- It is the difference between the present value of cash inflows and the present…
Q: An automobile manufacturer is considering a change in an assembly line that should save moneyby…
A:
Q: Ned Thompson Labs performs tests on superalloys, titanium, aluminum, and most metals. Tests on metal…
A: Annual cash flows, C = Annual revenue - annual cost = R - AOC = 70,000 - 30,000 = 40,000 NPV = -P +…
Q: You have two machines under consideration for an improved automated wrapping process for Snickers…
A: (a) Using an AW analysis, determine whichshould be selected at i = 15% per year.
Q: You have been asked to determine the most fınancially advantageous option for a new Product…
A: The question is based on the calculation of annual worth for long term investment. Annual worth is…
Q: Liquid Sleeve, Inc. is a company that makes a sealing solution for machine shaft surfaces that have…
A: NPV A variance between cash outflow (PV) and cash inflow (PV) over a time period.
Q: Acme Semiconductor is expanding its facility and needs to add equipment. There are three process…
A: Capital budgeting is a process of analyzing the feasibility and profitability of a project by…
Q: You are a manager at Percolated Fiber, which is considering expanding its operations in synthetic…
A: The value of any project or Investment is equal to present value of all future free cash flows over…
Q: Suppose that Demont has been given a summer job as an intern at Isaac Aircams, a company that…
A: Product cost refers to the measure of estimating the desired expenses incurred by a business in…
Q: Polaris Industries wishes to purchase a multiple-use in-plant ‘‘road test’’ simulator that can be…
A: Introduction:- Polaris Industries plans to acquire a multi-use in-plant "road test" simulator for…
Q: A large brokerage company is assessing the introduction of a new computer system to improve routing…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: The production department is proposing the purchase of an automatic insertion machine. It has…
A: Average rate of return = Estimated average annual income / Average investment
Q: Herme, the quarry supervisor for Espinosa Stone, wants to select the more economical of two…
A: Annual worth distributes present worth into equivalent uniform value over its useful life.
Q: Tim Smunt has been asked to evaluate two machines. After some investigation, he determines that…
A: NPV is an approach used in capital budgeting for evaluation of long term investments. NPV is given…
Q: A. Micro Processors Ltd is in process of purchasing a high-tech machine for its production of…
A: i. Machine A Machine B State of nature Rate of return [a] Probability [b] Expected return [a…
Q: The New England Soap Company is considering adding some processing equipment to the plant to aid in…
A: Given information : Putting values :
Q: Part A A software company is considering launching a new product in the market. To record consumer…
A: Comment- Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the…
The production department is proposing the purchase of an automatic insertion machine. It has identified three machines and has asked the accountant to analyze them to determine which one has the best average
| Machine A | Machine B | Machine C | ||||
| Estimated average income | $43,866.76 | $73,406.10 | $62,231.25 | |||
| Average investment | 313,334.00 | 244,687.00 | 414,875.00 |
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- The Lockit Company manufactures door knobs for residential homes and apartments. Lockit is considering the use of simple (single-driver) and multiple regression analyses to forecast annual sales because previous forecasts have been inaccurate. The new sales forecast will be used to initiate the budgeting process and to identify more completely the underlying process that generates sales. Larry Husky, the controller of Lockit, has considered many possible independent variables and equations to predict sales and has narrowed his choices to four equations. Husky used annual observations from 20 prior years to estimate each of the four equations. Following are definitions of the variables used in the four equations and a statistical summary of these equations: St=ForecastedsalesindollarsforLockitinperiodtSt1=ActualsalesindollarsforLockitinperiodt1Gt=ForecastedU.S.grossdomesticproductinperiodtGt1=ActualU.S.grossdomesticproductinperiodt1Nt1=Lockitsnetincomeinperiodt1 Required: 1. Write Equations 2 and 4 in the form Y = a + bx. 2. If actual sales are 1,500,000 in the current year, what would be the forecasted sales for Lockit in the coming year? 3. Explain why Larry Husky might prefer Equation 3 to Equation 2. 4. Explain the advantages and disadvantages of using Equation 4 to forecast sales.Jensen Tire Auto is deciding whether to purchase a maintenance contract for its new computer wheel alignment and balancing machine. Managers feel that maintenance expense should be related to usage, and they collected the following information on weekly usage (hours) and annual maintenance expense (in hundreds of dollars). a. Develop a scatter chart with weekly usage hours as the independent variable. What does the scatter chart indicate about the relationship between weekly usage and annual maintenance expense? b. Use the data to develop an estimated regression equation that could be used to predict the annual maintenance expense for a given number of hours of weekly usage. What is the estimated regression model? c. Test whether each of the regression parameters 0 and 1 is equal to zero at a 0.05 level of significance. What are the correct interpretations of the estimated regression parameters? Are these interpretations reasonable? d. How much of the variation in the sample values of annual maintenance expense does the model you estimated in part (b) explain? e. If the maintenance contract costs 3,000 per year, would you recommend purchasing it? Why or why not?Covington Pharmacies has decided to automate its insurance claims process. Two networked computer systems are being considered. The systems have an expected life of two years. The net cash flows associated with the systems are as follows. The cash benefits represent the savings created by switching from a manual to an automated system. The companys cost of capital is 10 percent. Required: 1. Compute the NPV and the IRR for each investment. 2. Show that the project with the larger NPV is the correct choice for the company.
- Mabbut Company has the following departmental manufacturing layout for one of its plants: A consulting firm recommended a value stream with the following manufacturing cell: Required: 1. Calculate the total time it takes to produce a batch of 10 units using the traditional departmental manufacturing layout. 2. Using cellular manufacturing, how much time is saved producing the same batch of 10 units? Assuming the cell operates continuously, what is the production rate? Which process controls this production rate? 3. Assume the processing time of Welding is reduced to 6 minutes, while the times of the other processes stay the same. What is the production rate now, and how long will it take to produce a batch of 10 units if the cell is in a continuous production mode?Assume that at the beginning of 20x2, Cicleta trained the 2 assembly workers in a new approach that had the objective of increasing the efficiency of the assembly process. Cicleta also began moving toward a JIT purchasing and manufacturing system. When JIT is fully implemented, the demand for expediting is expected to be virtually eliminated. It is expected to take two to three years for full implementation. Assume that receiving cost is a step-fixed cost with steps of 1,500 orders. The other three activities employ resources that are acquired as used and needed. At the end of 20x2, the following results were reported for the four activities: Required: 1. Prepare a trend report that shows the non-value-added costs for each activity for 20x1 and 20x2 and the change in costs for the two periods. Discuss the reports implications. 2. Explain the role of activity reduction for receiving and for expediting. What is the expected value of SQ for each activity after JIT is fully implemented? 3. What if at the end of 20x2, the selling price of a competing product is reduced by 27 per unit? Assume that the firm produces and sells 20,000 units of its product and that its product is associated only with the four activities being considered. By virtue of the waste-reduction savings, can the competitors price reduction be matched without reducing the unit profit margin of the product that prevailed at the beginning of the year? If not, how much more waste reduction is needed to achieve this outcome? In this case, what price decision would you recommend?Friendly Bank is attempting to determine the cost behavior of its small business lending operations. One of the major activities is the application activity. Two possible activity drivers have been mentioned: application hours (number of hours to complete the application) and number of applications. The bank controller has accumulated the following data for the setup activity: Required: 1. Estimate a regression equation with application hours as the activity driver and the only independent variable. If the bank forecasts 2,600 application hours for the next month, what will be the budgeted application cost? 2. Estimate a regression equation with number of applications as the activity driver and the only independent variable. If the bank forecasts 80 applications for the next month, what will be the budgeted application cost? 3. Which of the two regression equations do you think does a better job of predicting application costs? Explain. 4. Run a multiple regression to determine the cost equation using both activity drivers. What are the budgeted application costs for 2,600 application hours and 80 applications?
- Gumbrecht Company has the following departmental manufacturing layout for one of its plants: A consulting firm has recommended a value stream with the following manufacturing cell: Required: 1. Calculate the total time it takes to produce a batch of 20 units using the traditional departmental manufacturing layout. 2. Using cellular manufacturing, how much time is saved producing the same batch of 20 units? Assuming the cell operates continuously, what is the production rate? Which process controls this production rate? 3. Assume the processing time of Casting is reduced to 9 minutes, while the times of the other processes stay the same. What is the production rate now, and how long will it take to produce a batch of 20 units if the cell is in a continuous production mode?Stahman, Inc., estimates its hidden external failure costs using the Taguchi loss function. Stahlman produces plastic sheets that vary in thickness and grade. For one of its large-volume products, it was determined that k = 30,000 and T = 0.28 inches in diameter. A sample of four units produced the following values: Required: 1. Calculate the average loss per unit. 2. Assuming that 100,000 units were produced, what is the total hidden cost? 3. Assume that the multiplier for Stahmans hidden external failure costs is six. What are the measured external costs? Explain the difference between measured costs and hidden costs.The Port Authority sells a wide variety of cables and adapters for electronic equipment online. Last year the mean value of orders placed with the Port Authority was 47.28, and management wants to assess whether the mean value of orders placed to date this year is the same as last year. The values of a sample of 49,896 orders placed this year are collected and recorded in the tile PortAuthority. a. Formulate hypotheses that can be used to test whether the mean value of orders placed this year differs from the mean value of orders placed last year. b. Use the data in the file PortAuthority to conduct your hypothesis test. What is the p value for your hypothesis test? At = 0.01, what is your conclusion?
- Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its products is 65 minutes per unit. The budgeted conversion costs for the manufacturing cell dedicated to the product are 12,960,000 per year. The total labor minutes available are 1,440,000. During the year, the cell was able to produce 0.6 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs. Required: 1. Compute the theoretical conversion cost per unit. 2. Compute the applied conversion cost per minute (the amount of conversion cost actually assigned to the product). 3. Discuss how this approach to assigning conversion cost can improve delivery time performance. Explain how conversion cost acts as a performance driver for on-time deliveries.Corazon Manufacturing Company has a purchasing department staffed by five purchasing agents. Each agent is paid 28,000 per year and is able to process 4,000 purchase orders. Last year, 17,800 purchase orders were processed by the five agents. Required: 1. Calculate the activity rate per purchase order. 2. Calculate, in terms of purchase orders, the: a. total activity availability b. unused capacity 3. Calculate the dollar cost of: a. total activity availability b. unused capacity 4. Express total activity availability in terms of activity capacity used and unused capacity. 5. What if one of the purchasing agents agreed to work half time for 14,000? How many purchase orders could be processed by four and a half purchasing agents? What would unused capacity be in purchase orders?Bienestar, Inc., implemented cellular manufacturing as recommended by a consultant. The production flow improved dramatically. However, the company was still faced with the competitive need to improve its cycle time so that the production rate is one bottle every four minutes (15 bottles per hour). The cell structure is shown below; the times above the process represent the time required to process one unit. Required: 1. How many units can the cell produce per hour (on a continuous running basis)? 2. How long does it take the cell to produce one unit, assuming the cell is producing on a continuous basis? 3. What must happen so that the cell can produce one bottle every four minutes or 15 per hour, assuming the cell produces on a continuous basis?
