FINANCIAL+MAN.ACCT.-WKPPRS.,V.1-W/CODE
13th Edition
ISBN: 9781337812627
Author: WARREN
Publisher: CENGAGE L
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Chapter 27, Problem 27.19EX
To determine
Pareto Chart: Pareto Chart is a combination of line and bar graph shown together. It represents the totals of the attributes and their categories. So it shows the categories left to right with the largest total attribute on the left.
To Prepare: A Pareto Chart for the given information.
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Finch Company makes fine jewelry that it sells to department stores throughout the United States. Finch is trying to
decide which of the two bracelets to manufacture. Cost data pertaining to the two choices follow.
Bracelet ABracelet B
Cost of materials per unit
$
28
$ 34
Cost of labor per unit
44
44
Advertising cost per year
9,400
7,900
Annual depreciation on
5,700
5,400
existing equipment
Required
a. Identify the fixed costs and determine the amount of fixed cost for each product.
b. Identify the variable costs and determine the amount of variable cost per unit for each product.
c. Identify the avoidable costs and determine the amount of avoidable cost for each product.
Complete this question by entering your answers in the tabs below.
Required Required Required
A
B
C
Identify the avoidable costs and determine the amount of avoidable cost for each product.
Avoidable Costs
Bracelet Bracelet
A
B
Kelly Slater desires to purchase a new front office computer system for his Surfers Paradise Inn. After considerable discussion with purveyors, he has narrowed his choices to systems sold by M. Fanning ltd. and Jamie O’Brien and Co. The associated costs of each system are as follows:
M. Fanning ltd.
O’Brien and Co.
Initial Costs
29,000
31,000
Annual Costs:
Labour
22,000
22,000
Utilities
800
600
Supplies
1,500
1,500
Maintenance
2,500
1,500
Salvage Value (in 8 years)
3,000
5,000
Required:
1.Which are sunk costs?
2.Identify the irrelevant costs and explain why these costs are irrelevant!
3.Prepare a comparative cost analysis for the two alternatives. Ignore the time value of money and taxes. Include the relevant costs.
4.Which alternative do you recommend purchasing? Explain why!
Required Information
[The following information applies to the questions displayed below.]
UR Safe Systems Installs home security systems. Two of its systems, the ICU 100 and the ICU 900, have these
characteristics:
Design Specifications
Video cameras
Video monitors
Motion detectors
Floodlights
Alarms
Wiring
Installation
1,050 feet
21 hour
The ICU 100 sells for $860 Installed, and the ICU 900 sells for $1,570 Installed.
1. Current profit margin
2.
ICU 100
2
2
3
1
5
650 feet
11 hour
Required:
1. What are the current gross profit margin percentages on both systems?
2. UR Safe's management believes that it must drop the price on the ICU 100 to $800 and on the ICU 900 to $1,440 to remain
competitive in the market. Recalculate gross profit margin percentages for both products at these price levels and then compute the
target cost needed for each product to maintain the current gross profit margin percentages.
Profit margin
Target cost
(For all requirements, round your percentage answers to…
Chapter 27 Solutions
FINANCIAL+MAN.ACCT.-WKPPRS.,V.1-W/CODE
Ch. 27 - Prob. 1DQCh. 27 - Prob. 2DQCh. 27 - Why is a product-oriented layout preferred by lean...Ch. 27 - Prob. 4DQCh. 27 - Prob. 5DQCh. 27 - Why would a lean manufacturer strive to produce...Ch. 27 - Prob. 7DQCh. 27 - Prob. 8DQCh. 27 - Prob. 9DQCh. 27 - Why is the direct labor cost category eliminated...
Ch. 27 - Prob. 11DQCh. 27 - Prob. 12DQCh. 27 - Prob. 13DQCh. 27 - Prob. 27.1APECh. 27 - Prob. 27.1BPECh. 27 - Prob. 27.2APECh. 27 - Lean features Which of the following are features...Ch. 27 - Lean accounting The annual budgeted conversion...Ch. 27 - Prob. 27.3BPECh. 27 - Prob. 27.4APECh. 27 - Prob. 27.4BPECh. 27 - Process activity analysis Lexter Company incurred...Ch. 27 - Prob. 27.5BPECh. 27 - Prob. 27.1EXCh. 27 - Prob. 27.2EXCh. 27 - Lean principles Active Apparel Company...Ch. 27 - Lead time analysis Palm Pals Inc. manufactures toy...Ch. 27 - Reduce setup time Hammond Inc. has analyzed the...Ch. 27 - Calculate lead time Flint Fabricators Int....Ch. 27 - Calculate lead time Williams Optical Inc. is...Ch. 27 - Prob. 27.8EXCh. 27 - Prob. 27.9EXCh. 27 - Prob. 27.10EXCh. 27 - Prob. 27.11EXCh. 27 - Lean principles for a restaurant The management of...Ch. 27 - Prob. 27.13EXCh. 27 - Prob. 27.14EXCh. 27 - Prob. 27.15EXCh. 27 - Prob. 27.16EXCh. 27 - Prob. 27.17EXCh. 27 - Prob. 27.18EXCh. 27 - Prob. 27.19EXCh. 27 - Prob. 27.20EXCh. 27 - Process activity analysis The Brite Beverage...Ch. 27 - Prob. 27.22EXCh. 27 - Prob. 27.23EXCh. 27 - Prob. 27.1APRCh. 27 - Lead time Sound Tek Inc. manufactures electronic...Ch. 27 - Lean accounting Formula One Displays Inc....Ch. 27 - Pareto chart and cost of quality report for a...Ch. 27 - Prob. 27.1BPRCh. 27 - Lead time Master Chef Appliance Company...Ch. 27 - Lean accounting Com-Tel Inc. manufactures and...Ch. 27 - Pareto chart and cost of quality report for a...Ch. 27 - Prob. 27.1CPCh. 27 - Prob. 27.2CPCh. 27 - Prob. 27.3CPCh. 27 - Prob. 27.4CP
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