Schütt-die-Brüh-noh (SDBN), a German wine glass manufacturing company, produces two product linesof wine glasses. The basic line "Ortswein" is essentially aimed at normal customers who drink their dailyglass of wine at home and appreciate a reasonably priced product. The premium line "Großes Gewächsis aimed at the upscale wine drinker who appreciates the very high quality of the glass and is thereforewilling to pay significantly higher prices. The two lines are produced on the same machines with batchesof 700 Glasses per batch. The differences in the end products are achieved through different settingsand raw materials. Due to the higher quality requirements, the "Großes Gewächs" wine glasses requiremore time for the quality inspection conducted by several inspectors.The daily production data is as follows:Batches of glasses producedMachine hours per Batch of glassesDaily quality inspection hours per product lineTotal daily cost of quality inspectionBasic line"Ortswein"6214Premium line"Großes Gewächs"2,400 €2442Required:a. Calculate the quality inspection cost per batch of glasses using traditional absorption costing withnumber of machine hours as the allocation base.b. Calculate the quality inspection cost per batch of glasses using activity-based costing. Assumequality inspection time is the cost driver.c. Which of the methods used in (a) and (b) should SDBN use for pricing considerations & calculations?What would be your recommendation and why?

The distribution of costs which has been costed by the company overall in general requires to be…

a. Calculate the quality inspection cost per batch of glasses using traditional absorption costing with number of machine hours as the allocation base. b. Calculate the quality inspection cost per batch of glasses using activity-based costing. Assume quality inspection time is the cost driver. c. Which of the methods used in (a) and (b) should SDBN use for pricing considerations & calculations? What would be your recommendation and why?

a. Calculate the quality inspection cost per batch of glasses using traditional absorption costing with number of machine hours as the allocation base. b. Calculate the quality inspection cost per batch of glasses using activity-based costing. Assume quality inspection time is the cost driver. c. Which of the methods used in (a) and (b) should SDBN use for pricing considerations & calculations? What would be your recommendation and why?

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter13: Nonlinear Optimization Models

Section: Chapter Questions

Problem 5P: Jims Camera shop sells two high-end cameras, the Sky Eagle and Horizon. The demand for these two...

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Suppose a distribution channel for the sale of Peruvian wine includes a manufacturer, an importer, a distributor, and a retailer. The retailer sells the wine to consumers for $18.00 a bottle. The margins for the retailer, distributor, importer and manufacturer are 33%, 25%, 33% and 50% respectively. Can you calculate the manufacturer’s cost? Suppose a distribution channel for the sale of Peruvian wine includes a manufacturer, an importer, a distributor, and a retailer. The retailer sells the wine to consumers for $18.00 a bottle. If we know the margins for each channel member in the chain, can we calculate the manufacturer’s cost?
Jims Camera shop sells two high-end cameras, the Sky Eagle and Horizon. The demand for these two cameras are as follows: Ds = demand for the Sky Eagle, Ps is the selling price of the Sky Eagle, DH is the demand for the Horizon, and PH is the selling price of the Horizon. DS=2220.60Ps+0.35PHDH270+0.10Ps0.64PH The store wishes to determine the selling price that maximizes revenue for these two products. Develop the revenue function for these two models, and find the prices that maximize revenue.
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