NEW MyLab Accounting with Pearson eText -- Access Card -- for Managerial Accounting
4th Edition
ISBN: 9780133451481
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 12, Problem 12.18AE
Compute payback period and analyze changes (Learning Objective 2)
The Cleveland Foodbank is a nonprofit organization that receives donations of food and distributes this food to appropriate charitable organizations. Many times, large quantities of food need to be shrinkwrapped to secure the items for shipping to the charitable organizations. The VP of Operations at the Cleveland Foodbank recently performed a time study of the time that its warehouse personnel spend waiting for the shrinkwrap machine to become available. He used this wait time data and the following assumptions to determine the financial benefit of buying a second shrinkwrap machine.
- Cost of new shrinkwrap machine plus installation = $24,000
- Average wait time per warehouse picker per day = 60 minutes
- Number of warehouse pickers = 7
- Hourly wage of warehouse personnel = $12.00
- Foodbank is open 5 days a week, 52 weeks a year, except for 10 holidays
- Expected useful life of machine = 15 years
- Expected salvage value = $2,000
Requirements
- 1. What is the expected net
cash inflow per year from purchasing a second shrinkwrap machine (i.e., how much cost could be saved each year by eliminating the wait time)? - 2. What is the payback period of the second shrinkwrap machine? Round your answer to the nearest two decimal places.
- 3. What would the expected net cash inflow per year be if the hourly wage rate used for this analysis was increased by 25% to reflect the cost of employee benefits?
- 4. What is the payback period of the second shrinkwrap machine when the increased wage rate is used to calculate the expected net cash inflow per year? Round your answer to the nearest two decimal places.
- 5. Did the payback period using the increased hourly wage rate increase or decrease as compared to the original payback period using the hourly rate without any benefits included? Explain.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
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
he Shining Stars primary school was the recent recipient of a technology grant to source and implement a school management system. The school administrator is not technology savvy and therefore sought advice from three of the board members who were knowledgeable in the information systems and technology field.
One director advised the administrator to purchase an off-the-shelf solution which would allow the school to get the system configured and up and running in a short period with reasonable costs.
The second advised the administrator to invest in the development of a unique system to meet the custom requirements of the school’s administration. He suggested that this would create a closer fit to the school’s needs compared to purchasing software, but will cost more.
The third director suggested using an open source solution which would have little if any upfront costs but may take some time to set up.
i) Identify the…
Case Analysis: Analyze the case and determine if he gain or loss? Show your computation and explain.
After graduation from Senior High School, Richard Cruz decided to put up photocopying business because there was none near the vicinity of the school. Students had to walk far just to go to the nearest photocopying center. Richard knew that the demand for photocopying service among high school students was high because teachers often assigned readings and lecture notes that should be photocopied.
Richard opened his photocopying business on August 1, 2019. He rented a commercial space located in front of the high school gate for P 5,000 per month. He also borrowed P 50,000 (without interest) from his father to buy a brand-new photocopying machine costing P30,000 and to pay for other start-up expenses. He planned to pay thus P50,000 in four years. From his personal savings, Richard Spent P10,000 for supplies like bond papers, staplers, paper clips, and other supplies that would need in…
Chapter 12 Solutions
NEW MyLab Accounting with Pearson eText -- Access Card -- for Managerial Accounting
Ch. 12 - Prob. 1QCCh. 12 - (Learning Objective 2) After identifying potential...Ch. 12 - Prob. 3QCCh. 12 - Prob. 4QCCh. 12 - Prob. 5QCCh. 12 - Prob. 6QCCh. 12 - Prob. 7QCCh. 12 - Prob. 8QCCh. 12 - Prob. 9QCCh. 12 - (Learning Objective 5) Which of the following...
Ch. 12 - Order the capital budgeting process (Learning...Ch. 12 - Prob. 12.2SECh. 12 - Prob. 12.3SECh. 12 - Prob. 12.4SECh. 12 - Prob. 12.5SECh. 12 - Prob. 12.6SECh. 12 - Prob. 12.7SECh. 12 - Prob. 12.8SECh. 12 - Prob. 12.9SECh. 12 - Prob. 12.10SECh. 12 - Prob. 12.11SECh. 12 - Prob. 12.12SECh. 12 - Prob. 12.13SECh. 12 - Prob. 12.14SECh. 12 - Prob. 12.15SECh. 12 - Identify ethical standards violated (Learning...Ch. 12 - Prob. 12.17AECh. 12 - Compute payback period and analyze changes...Ch. 12 - Prob. 12.19AECh. 12 - Prob. 12.20AECh. 12 - Prob. 12.21AECh. 12 - Prob. 12.22AECh. 12 - Calculate the payback and NPV for a sustainable...Ch. 12 - Prob. 12.24AECh. 12 - Prob. 12.25AECh. 12 - Prob. 12.26AECh. 12 - Prob. 12.27AECh. 12 - Prob. 12.28AECh. 12 - Prob. 12.29AECh. 12 - Prob. 12.30AECh. 12 - Prob. 12.31AECh. 12 - Prob. 12.32AECh. 12 - Prob. 12.33AECh. 12 - Prob. 12.34AECh. 12 - Prob. 12.35AECh. 12 - Prob. 12.36BECh. 12 - Prob. 12.37BECh. 12 - Prob. 12.38BECh. 12 - Prob. 12.39BECh. 12 - Prob. 12.40BECh. 12 - Prob. 12.41BECh. 12 - Prob. 12.42BECh. 12 - Prob. 12.43BECh. 12 - Prob. 12.44BECh. 12 - Prob. 12.45BECh. 12 - Prob. 12.46BECh. 12 - Prob. 12.47BECh. 12 - Prob. 12.48BECh. 12 - Prob. 12.49BECh. 12 - Prob. 12.50BECh. 12 - Prob. 12.51BECh. 12 - Prob. 12.52BECh. 12 - Prob. 12.53BECh. 12 - Prob. 12.54BECh. 12 - Prob. 12.55APCh. 12 - Prob. 12.56APCh. 12 - Prob. 12.57APCh. 12 - Prob. 12.58APCh. 12 - Prob. 12.59BPCh. 12 - Prob. 12.60BPCh. 12 - Evaluate an investment using all four methods...Ch. 12 - Prob. 12.62BPCh. 12 - Prob. 12.63SCCh. 12 - Discussion Questions 1. Describe the capital...Ch. 12 - Prob. 12.65ACTCh. 12 - Prob. 12.66ACTCh. 12 - Prob. 12.67ACT
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
- You are serving as the chair for your community's annual wellness campaign. A key event is the annual Walk 3k, Run 10k, Ride 20k event. The event is staged entirely by volunteers and the goal is to attract community-wide awareness of getting active as a key step to wellness. In other words, the goal is not to raise money, but to prompt awareness. As the chair, you set a financial goal to break even on the one and only cost of the event, a fitness bag with the community seal and the event motto, “I AM ON THE RIGHT TRACK!” The cost of the bags, which must be ordered in batches of 100, are: Bags/ Participants Fixed Cost Variable Cost Total Cost Marginal Cost 0 $1,700 $ - $1,700 100 $1,700 $500 $2,200 [a] 200 $1,700 $1,200 $2,900 [b] 300 $1,700 $2,700 $4,400 [c] 400 $1,700 $5,200 $6,900 [d] 500 $1,700 $9,000 $10,700 [e] 600 $1,700 $15,000 $16,700 [f] 700 $1,700 $23,800 $25,500…arrow_forwardThe Shining Stars primary school was the recent recipient of a technology grant to source and implement a school management system. The school administrator is not technology savvy and therefore sought advice from three of the board members who were knowledgeable in the information systems and technology field. One director advised the administrator to purchase an off-the-shelf solution that would allow the school to get the system configured and up and running in a short period with reasonable costs. The second advised the administrator to invest in the development of a unique system to meet the custom requirements of the school’s administration. He suggested that this would create a closer fit to the school’s needs compared to purchasing software, but will cost more. The third director suggested using an open-source solution which would have little if any upfront costs but may require some customization. The school administrator must decide about which solution to go with.…arrow_forwardPlease review the rubric prior to beginning the assignment to become familiar with the expectations for successful completion.You are required to submit this assignment to LopesWrite. Please refer to the directions in the Student Success Center.Paul Duncan, financial manager of EduSoft Inc., is facing a dilemma. The firm was founded 5 years ago to provide educational software for the rapidly expanding primary and secondary school markets. Although EduSoft has done well, the firm's founder believes an industry shakeout is imminent. To survive, EduSoft must grab market share now, and this will require a large infusion of new capital.Because he expects earnings to continue rising sharply and looks for the stock price to follow suit, Mr. Duncan does not think it would be wise to issue new common stock at this time. On the other hand, interest rates are currently high by historical standards, and the firm's B rating means that interest payments on a new debt issue would be prohibitive.…arrow_forward
- he University of Cincinnati Center for Business Analytics is an outreach center that collaborates with industry partners on applied research and continuing education in business analytics. One of the programs offered by the center is a quarterly Business Intelligence Symposium. Each symposium features three speakers on the real-world use of analytics. Each corporate member of the center (there are currently 10) receives twelve free seats to each symposium. Nonmembers wishing to attend must pay $75 per person. Each attendee receives breakfast, lunch, and free parking. The following are the costs incurred for putting on this event: Rental cost for the auditorium: $150 Registration Processing: $8.50 per person Speaker Costs: 3@$800 = $2,400 Continental Breakfast: $4.00 per person Lunch: $7.00 per person Parking: $5.00 per person (a) The Center for Business Analytics is considering a refund policy for no-shows. No refund would be given for members who do not…arrow_forward(Learning Objective 2: Distinguish a capital expenditure from an immediate expense)LimeBike, located in San Mateo, California, is a startup founded in 2017. Its mission isto make shared bicycles accessible and affordable. The company has taken the basic idea ofshared bicycles and eliminated the need to return the bike to a docking station, which may notbe near the cyclist’s destination. LimeBike charges $1 per 30 minutes of riding, or $0.50 perride for students.To use LimeBike, you first use the LimeBike app to locate one of the citrus-colored bikesnear your location. Once you are at the bike, you scan the QR code on the bike or enter thebike’s plate number into the app to unlock the bike. When you are finished using the bike, youpark the bike by a bike rack or post––anywhere that is legal and visible. Once you press downthe back-wheel lock, the trip is finalized and your payment is processed by LimeBike’s app.LimeBike does not depend on government funding, making it appealing to…arrow_forwardYou wish to take an Excel course. You may enroll at one within your school or you may take a community class at the local library. You've gathered the following information to aid in your decision-making process: Costs/Benefits College Course Community Course Cost $4,300 $1,190 Distance to course 0.20 miles (walking distance) 18 miles (driving distance) Timing of course Weekday Weekend Number of meetings 16 8 Qualitative considerations Convenience, quality of instruction Flexibility, brief duration Pretend transportation (gas, mileage, and parking) cost $220 per class session at the library. If you consider solely the cost - including transportation - of each alternative, which would you choose? Multiple Choice College course Community course Both alternatives Neither alternativearrow_forward
- Triad 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 education program for grade school children who are having difficulty with the reading and math skills. The following relevant cost are expected if the program is accepted:arrow_forwardThe University of Cincinnati Center for Business Analytics is an outreach center that collaborates with industry partners on applied research and continuing education in business analytics. One of the programs offered by the center is a quarterly Business Intelligence Symposium. Each symposium features three speakers on the real-world use of analytics. Each corporate member of the center (there are currently 10) receives eight free seats to each symposium. Nonmembers wishing to attend must pay $75 per person. Each attendee receives breakfast, lunch, and free parking. The following are the costs incurred for putting on this event: Rental cost for the auditorium: $150 Registration Processing: $8.50 per person Speaker Costs: 3@$800 = $2,400 Continental Breakfast: $4.00 per person Lunch: $7.00 per person Parking: $5.00 per person (a) The Center for Business Analytics is considering a refund policy for no-shows. No refund would be given for members who do not…arrow_forwardThe University of Cincinnati Center for Business Analytics is an outreach center that collaborates with industry partners on applied research and continuing education in business analytics. One of the programs offered by the center is a quarterly Business Intelligence Symposium. Each symposium features three speakers on the real-world use of analytics. Each corporate member of the center (there are currently 10) receives seven free seats to each symposium. Nonmembers wishing to attend must pay $75 per person. Each attendee receives breakfast, lunch, and free parking. The following are the costs incurred for putting on this event: Rental cost for the auditorium: $150 Registration Processing: $8.50 per person Speaker Costs: 3@$800 = $2,400 Continental Breakfast: $4.00 per person Lunch: $7.00 per person Parking: $5.00 per person (a) The Center for Business Analytics is considering a refund policy for no-shows. No refund would be given for members who do not…arrow_forward
- Make a feasibility study for Virtual Reality In Education project by making the balance sheet, Project Cost and Financial Plan. The donor is a non-profit financial institution. The investment cost of the project is $500,000. land $100,000 Construction $100,000 Supplies and equipment $200,000 Stuff: 2 employees, 2 guards and 2 cleaners, working 8 hours, an annual salary of $100,000 The answer is only tables of the the balance sheet, Project Cost and Financial Plan.arrow_forwardThe University of Cincinnati Center for Business Analytics is an outreach center that collaborates with industry partners on applied research and continuing education in business analytics. One of the programs offered by the center is a quarterly Business Intelligence Symposium. Each symposium features three speakers on the real-world use of analytics. Each corporate member of the center (there are currently 11) receives five free seats to each symposium. Nonmembers wishing to attend must pay $75 per person. Each attendee receives breakfast, lunch, and free parking. The following are the costs incurred for putting on this event: Rental cost for the auditorium $150 Registration processing $8.50 per person Speaker costs 3@$800 = $2,400 Continental breakfast $4.00 per person Lunch $7.00 per person Parking $5.00 per person (a) Build a spreadsheet model that calculates a profit or loss for 100 nonmember registrants. If required, round your answer to two…arrow_forwardThe University of Cincinnati Center for Business Analytics is an outreach center that collaborates with industry partners on applied research and continuing education in business analytics. One of the programs offered by the center is a quarterly Business Intelligence Symposium. Each symposium features three speakers on the real-world use of analytics. Each of the corporate members of the center (there are currently 10) receives five free seats to each symposium. Nonmembers wishing to attend must pay $75 per person. Each attendee receives breakfast, lunch, and free parking. The following are the costs incurred for putting on this event: Rental cost for the auditorium: $150 Registration Processing: $8.50 per person Speaker Costs: 3@$800 $2,400 Continental Breakfast: $4.00 per person Lunch: $7.00 per person Parking: $5.00 per person (a) The Center for Business Analytics is considering a refund policy for no-shows. No refund would be given for members who 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
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
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