ACCESS IN BB-ACC202
null Edition
ISBN: 9780135375587
Author: Pearson
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 1, Problem 1.16AE
Lean production cost-benefit analysis (Learning Objective 5)
McIntyre Industries manufactures iPhone case covers. Sarabeth Anderson, the CEO, is trying to decide whether to adopt a lean thinking model. She expects that adopting lean production would save $77,000 in warehousing expenses and $39,600 in spoilage costs. Adopting lean production will require several one-time up-front expenditures: $25,000 for an employee training program, $89,000 to streamline the plant’s production process, and $7,000 to identify suppliers that will guarantee zero defects and on-time delivery.
Requirements
- 1. What are the total costs of adopting lean production?
- 2. What are the total benefits of adopting lean production?
- 3. Should the company adopt lean production? Why or why not?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
P10-53B Determine transfer price at a manufacturer under various scenarios (Learning Objective 4) Assume the Small Components Division of Lang Manufacturing produces a video card used in the assembly of a variety of electronic products. The division's manufacturing costs, and variable selling expenses related to the video card are as follows:
Cost per unit
Direct materials
$ 14.00
Direct labor
$ 4.00
Variable manufacturing overhead
$ 8.00
Fixed manufacturing overhead (at current production level)
$ 9.00
Variable selling expenses
$ 10.00
The Computer Division of Lang Manufacturing can use the video card produced by the Small Components Division and is interested in purchasing the video card in-house rather than buying it from an outside supplier. The Small Components Division has sufficient excess capacity with which to make the extra video cards. Because of competition, the market price for this video card is $30 regardless of whether the…
Profit Planning and Control
This case is a manufacturer and could make specialty bikes, ski or outdoor equipment, computers, food like chocolates, saltwater taffy, cookies, or donuts, etc.
Create the balance sheet, income statement, and statement of the cash flow from the following information.
Use the following information for the learning experiences
Sales volume units = 11,000
Sales price/unit = $100
Variable manufacturing costs/unit = $60
Fixed manufacturing costs = $210,000
Fixed sales & administration costs = $190,000
Business income tax rate = 25%
Current assets = $250,000 (Cash $50,000, Accounts Receivables $100,000, Inventory $100,000)
Fixed assets = $750,000
Current liabilities = $200,000 (Accounts Payable $100,000, Short Term Debt $100,000)
Long Term Debt = $300,000
Owners' Equity = $500,000
In an effort to raise the demand for reading tests, managers are planning to lower the price from $36 per test to $20 per test, the current price of the math test. They believe that doing so will increase the demand for reading tests to 60,000. Prepare a contribution format income statement reflecting Abado’s new pricing and demand structure.
Abado Profiles provides testing services to school districts that wish to assess students’ reading and mathematical abilities. Last year Abado evaluated 60,000 math tests and 20,000 reading tests. An income statement for last year follows.
Math Testing
Reading Testing
Total
Per Unit
Total
Per Unit
Total Company
Sales revenue
$1,200,000
$20
$720,000
$36
$1,920,000
Variable expenses
840,000
14
360,000
18
1,200,000
Contribution margin
$360,000
$6
$360,000
$18
720,000
Fixed expenses
360,000
Operating income
$360,000
Chapter 1 Solutions
ACCESS IN BB-ACC202
Ch. 1 - (Learning Objective 1) Which of the following...Ch. 1 - (Learning Objective 2) Managerial accounting...Ch. 1 - (Learning Objective 3) Which of the following...Ch. 1 - (Learning Objective 3) Of the following skills,...Ch. 1 - (Learning Objective 4) Which of the following...Ch. 1 - Prob. 6QCCh. 1 - Prob. 7QCCh. 1 - Prob. 8QCCh. 1 - (Learning Objective 5) Which of the following is...Ch. 1 - (Learning Objective 5) All of the following are...
Ch. 1 - Managers responsibilities (Learning Objective 1)...Ch. 1 - Contrast managerial and financial accounting...Ch. 1 - Prob. 1.3SECh. 1 - Prob. 1.4SECh. 1 - Prob. 1.5SECh. 1 - Prob. 1.6SECh. 1 - Violations of ethical standards (Learning...Ch. 1 - Identify current competitive tools (Learning...Ch. 1 - Identify ethical standards violated (Learning...Ch. 1 - Define key terms (Learning Objectives 1, 2, 3, 4,...Ch. 1 - Define key terms (Learning Objectives 1 2)...Ch. 1 - Prob. 1.12AECh. 1 - Identify users of accounting information (Learning...Ch. 1 - Classify ethical responsibilities (Learning...Ch. 1 - Equipment purchase cost-benefit analysis (Learning...Ch. 1 - Lean production cost-benefit analysis (Learning...Ch. 1 - Identify sustainability efforts as impacting...Ch. 1 - Prob. 1.18BECh. 1 - Prob. 1.19BECh. 1 - Identify users of accounting information (Learning...Ch. 1 - Classify ethical responsibilities (Learning...Ch. 1 - Equipment purchase cost-benefit analysis (Learning...Ch. 1 - Lean production cost-benefit analysis (Learning...Ch. 1 - Prob. 1.24BECh. 1 - Management processes and accounting information...Ch. 1 - Ethical dilemmas (Learning Objective 4) Barb Perot...Ch. 1 - ERP cost-benefit analysis (Learning Objective 5)...Ch. 1 - Online order system cost-benefit analysis...Ch. 1 - Continuation of P1-28A: revised estimates...Ch. 1 - Management processes and accounting information...Ch. 1 - Ethical dilemmas (Learning Objective 4) ETHICS...Ch. 1 - ERP cost-benefit analysis (Learning Objective 5)...Ch. 1 - Online order system cost-benefit analysis...Ch. 1 - Continuation of P1-33B: revised estimates...Ch. 1 - Discuss how managerial accounting can be used at...Ch. 1 - Discussion Questions 1. What are the three main...Ch. 1 - Prob. 1.37ACTCh. 1 - Prob. 1.38ACTCh. 1 - Ethics and casual conversations (Learning...Ch. 1 - Using managerial accounting information to manage...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Learning curve, cumulative average-time learning model. Northern Defense manufactures radar systems. It has just completed the manufacture of its first newly designed system, RS-32. Manufacturing data for the RS-32 follow: Calculate the total variable costs of producing 2, 4, and 8 units.arrow_forwardTriad Children's Center (TCC), a non-profit organization, uses relevant cost analysis to determine whether new services are desirable. TCC is looking at adding a new educational program for grade school children who are having difficulty with their reading and math skills. The following relevant costs are expected if the program is accepted: Costs (per year) Program Director salary $ 39,000 Part-time Assistants $ 28,000 Variable cost per child $ 900 TCC estimates that a maximum of 40 children will participate in this program in the first year. If TCC decides to implement this program, funding will be received from the City Chamber of Commerce ($50,000) and a local Private University Endowment Fund ($35,000). Calculate the expected surplus or deficit from operations given the above information.arrow_forwardPlease step by step process. Professor von Nordenflycht presents Dean Kayande with two new proposals for offering a graduate certificate program. Both programs will cost $60,000, for classroom and instructor time. Both programs are projected to have two possible revenue outcomes. Program 1, which focuses on accounting, is projected to have a 50% chance of generating $150,000 in revenue and a 50% chance of generating $100,000 in revenue. Project 2, which focuses on cryptocurrencies, is predicted to have a 62.5% chance of generating $200,000 in revenue or, otherwise, generating no revenue! a. What is the expected value of each program? b. What is the variance of each program?arrow_forward
- NUBD Company is planning to introduce a new product with an 80 percent learning rate for production for batches of 1,000 units. The variable labor costs are P30 per unit for the first 1,000-unit batch. Each batch requires 100 hours. There are P10,000 in fixed costs not subject to learning. What is the cumulative total time (labor hours) to produce 16,000 units based on the cumulative average-time learning curve? A. 655.36 hours B. 256 hours C. 160 hours D. 409.6 hoursarrow_forwardondor Airplane Company has built a new model jet aircraft which it intends to sell to high net worth clients. This aircraft required 25,000 hours to complete. Condor believes an incremental unit-time learning model with an 82% learning curve best reflects the company's production efficiency. Condor just received a contract to make fifteen identical aircraft. What will be the expected unit time for the sixteenth aircraft?arrow_forwardA firm has recently added a new product to their offerings. Manufacturing reports that production is going smoothly and factory workers are becoming familiar with the manufacture of this product. All expectations are that the current rate of learning will continue and the manufacture of future units will be more efficient (i.e., take less time). The following shown table shows the results for the first two units produced. The firm has an order for two additional units. Assuming the pattern of learning curve continues (same rate): Solve, a. At what rate is learning occurring? b. How long will it take to produce the fourth unit? c. If the labor rate is $15 per hour, what is the cumulative average labor cost per unit for the first four units produced?arrow_forward
- Learning CurveBordner Company manufactures HVAC (heating, ventilation, and air conditioning) systems for commercial buildings. For each new design, Bordner faces a 90 percent learning rate. On aver-age, the first unit of a new design takes 600 hours. Direct labor is paid $25 per hour. Required:1. Set up a table with columns showing: the cumulative number of units, cumulative average time per unit in hours, and cumulative total time in hours. Show results by row for total pro-duction of one unit, two units, four units, eight units, and sixteen units. (Round hour answers to two significant digits.) 2. What is the total labor cost if Bordner makes the following number of units: one, four, sixteen? What is the average cost per system for the following number of systems: one, four, or sixteen? (Round your answers to the nearest dollar.) 3. Using the logarithmic function, set up a table with columns showing: the cumulative number of units, cumulative average time per unit in hours,…arrow_forwardEric Krassow's firm is about to bid on a new radar system. Although the product uses new technology, Krassow believes that a learning rate of 75% is appropriate. The first unit is expected to take 700 hours, and the contract is for 40 units. What is the total amount of hours to build the 40 units?arrow_forwardCost estimation, cumulative average-time learning curve. The Pacic Boat Company, which is under contract to the U.S. Navy, assembles troop deployment boats. As part of its research program, it completes the assembly of the rst of a new model (PT109) of deployment boats. The Navy is impressed with the PT109. It requests that Pacic Boat submit a proposalon the cost of producing another six PT109s. Pacic Boat reports the following cost information for the rst PT109 assembled and uses a 90% cumulative average-time learning model as a basis for forecasting direct manufacturing laborhours for the next six PT109s. (A 90% learning curve means b = −0.152004.)arrow_forward
- Sandhill’s managers have determined that variable costs per unit will increase by 20% beginning next month. To offset this increase in costs, they are considering a 20% increase in the sales price. Market research indicates that the price increase will result in a 2% decrease in the number of learning systems Sandhill sells. What will be Sandhill’s expected operating income if the price increase is implemented? (Round per unit calculations to 2 decimal places e.g. 52.75 and final answer to 0 decimal places, e.g. 5,275.) Total Per Unit Sales revenue $687,500 $55 Variable expenses 240,625 19.25 Contribution margin 446,875 $35.75 Fixed expenses 312,000 Operating income $ 134,875arrow_forwardC7-73 Calculate breakeven and margin of safety after hotel renovation (Learning Objective 2) Cost-Volume-Profit Analysis 437 This case is a continuation of the Caesars Entertainment Corporation serial case that began in Chapter 1. Refer to the introductory story in chapter 1 (see page 43) for additional background. (The components of the Caesars serial case can be completed in any order.) Caesars Palace® Las Vegas made headlines when it undertook a $75 million renovation. In mid-September 2015, the hotel closed its then-named Roman Tower, which was last updated in 2001, and started a major renovation of the 567 rooms housed in that tower . On January 1, 2016, the newly renamed Julius Tower reopened, replacing the Roman Tower. In addition to renovating the existing rooms and suites in the former Roman Tower, 20 guest rooms were added to the Roman Tower. With the renovation completed, Caesars expects the Julius Tower room rate to average around $149 per night. This increase, a $25 or 20…arrow_forwardEthical Behavior Consider the following scenario between Dave, a printer, and Steve, an assistant in the local universitys athletic department. Steve: Dave, our department needs to have 10,000 posters printed for the basketball team for next year. Heres the mock-up, and well need them in a month. How much will you charge? Dave: Well, given the costs I have for ink and paper, 1 can come in at around 5,000. Steve: Great, heres what I want you to do. Print me up an invoice for 7,500. Huts our budget. Then, when they pay you, you give me a check for 2,500. Ill make sure that you get the job. Required: CONCEPTUAL CONNECTION Is Steves proposal ethical? What should Dave do?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Inspection and Quality control in Manufacturing. What is quality inspection?; Author: Educationleaves;https://www.youtube.com/watch?v=Ey4MqC7Kp7g;License: Standard youtube license