Financial & Managerial Accounting
14th Edition
ISBN: 9781337119207
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 26, Problem 26.17EX
Pareto chart for a service company
Three Rivers Inc. provides cable TV and Internet service to the local community. The activities, and activity costs of Three Rivers are identified as follows:
| Activities | Activity Cost |
| Billing error correction | $ 60,000 |
| Cable signal testing | 140,000 |
| Reinstalling service (installed incorrectly the first time) | 40,000 |
| Repairing satellite equipment | 50,000 |
| Repairing underground cable connections to the customer | 25,000 |
| Replacing old technology cable with higher quality cable | 175,000 |
| Replacing old technology signal switches with higher quality switches | 150,000 |
| Responding to customer home repair requests | 30,000 |
| Training employees | 80,000 |
| Total | $750,000 |
Prepare a Pareto chart of these activities.
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Three Rivers Inc. provides cable TV and Internet service to the local community. The activities and activity costs of Three Rivers are identified as follows:
Activities
Activity Cost
Billing error correction
$60,000
Cable signal testing
140,000
Reinstalling service (installed incorrectly the first time)
40,000
Repairing satellite equipment
50,000
Repairing underground cable connections to the customer
25,000
Replacing old technology cable with higher quality cable
175,000
Replacing old technology signal switches with higher quality switches
150,000
Responding to customer home repair requests
30,000
Training employees
80,000
Total
750,000
Prepare a Pareto chart of these activities.
National Investor Group is opening an office in Portland, Oregon. Fixed monthly costs are office rent ($8,10), utilities ($2,000), special telephone lines ($1,500), a connection with an online brokerage service ($2,500), and the salary of a finanical planner ($5,200). Variable costs include payments to the financial planner (9% of revenue), advertising (11% of revenue), supplies and postage (4% of revenue), and usage fees for the telephone lines and computerized brokerage service (6% of revenue).
REQUIREMENTS
:Use the contribution margin ratio approach to compute National's breakeven revenue in dollars. If the average trade leads to $1,000 in revenue for National, how manhy trades must be made to break even?
:Use the equation approach to compute the dollar revenues needed to earn a monthly target profit of $12,600.
:Graph national's CVP relationships. Assume that an average trade leads to $1,000 in revenue for National. Show the breakeven point, the sales revenue line, the fixed cost…
-1
The Rainier Company provides landscaping services to corporations and businesses. All its landscaping work requires Rainier to use landscaping equipment. Its land- scaping equipment has the capacity to do 10,000 hours of landscaping work. It is
currently utilizing 9,000 hours of equipment time. Rainier charges $80 per hour for landscaping work. Cost information for the current activity level is as follows:
Revenues ($80 * 9,000 hours)
Variable landscaping costs (including materials and labor), which vary
with the number of hours worked ($50 per hour * 9,000 hours) Fixed landscaping costs
Variable marketing costs (5% of revenues)
Fixed marketing costs
Total costs Operating income
$720,000 450,000
108,000 36,000 72,000
666,000
$ 54,000
Rainier has just received a one-time only special order for landscaping work from Lasell Corporation at $60 per hour that would require 1,000 hours of equipment time. Should Rainier accept the offer even though revenue per hour is less than…
Chapter 26 Solutions
Financial & Managerial Accounting
Ch. 26 - Prob. 1DQCh. 26 - Prob. 2DQCh. 26 - Why is a product-oriented layout preferred by lean...Ch. 26 - Prob. 4DQCh. 26 - Prob. 5DQCh. 26 - Why would a lean manufacturer strive to produce...Ch. 26 - Prob. 7DQCh. 26 - Prob. 8DQCh. 26 - Prob. 9DQCh. 26 - Why is the direct labor cost category eliminated...
Ch. 26 - Prob. 11DQCh. 26 - Prob. 12DQCh. 26 - Prob. 13DQCh. 26 - Lead time Rough Riders Inc. manufactures jeans in...Ch. 26 - Lean features Which of the following are features...Ch. 26 - Lean accounting The annual budgeted conversion...Ch. 26 - Cost of quality report A quality control activity...Ch. 26 - Process activity analysis Roen Company incurred an...Ch. 26 - Prob. 26.1EXCh. 26 - Prob. 26.2EXCh. 26 - Lean principles Active Apparel Company...Ch. 26 - Lead time analysis Palm Pals Inc. manufactures toy...Ch. 26 - Reduce setup time Hammond Inc. has analyzed the...Ch. 26 - Calculate lead time Flint Fabricators Int....Ch. 26 - Calculate lead time Williams Optical Inc. is...Ch. 26 - Prob. 26.8EXCh. 26 - Prob. 26.9EXCh. 26 - Lean principles for a restaurant The management of...Ch. 26 - Prob. 26.11EXCh. 26 - Lean accounting Westgate Inc. uses a lean...Ch. 26 - Lean accounting Modern Lighting Inc. manufactures...Ch. 26 - Lean accounting Vintage Audio Inc. manufactures...Ch. 26 - Pareto chart Meagher Solutions Inc. manufacture....Ch. 26 - Prob. 26.16EXCh. 26 - Pareto chart for a service company Three Rivers...Ch. 26 - Cost of quality and value-added/non-value-added...Ch. 26 - Process activity analysis The Brite Beverage...Ch. 26 - Process activity analysis for a service company...Ch. 26 - Prob. 26.21EXCh. 26 - Prob. 26.1APRCh. 26 - Lead time Sound Tek Inc. manufactures electronic...Ch. 26 - Lean accounting Dashboard Inc. manufactures and...Ch. 26 - Pareto chart and cost of quality report for a...Ch. 26 - Prob. 26.1BPRCh. 26 - Lead time Master Chef Appliance Company...Ch. 26 - Lean accounting Com-Tel Inc. manufactures and...Ch. 26 - Pareto chart and cost of quality report for a...Ch. 26 - Prob. 1ADMCh. 26 - Turn around time in an operating room of a...Ch. 26 - Prob. 3ADMCh. 26 - Ethics in Action In August, Lannister Company...Ch. 26 - Prob. 26.3TIF
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