1. Calculate the amount and cost of unused engineering support capacity at the beginning of 2020, based on the number of jobs actually done in 2020. 2. Suppose Hurley can add or reduce its engineering support capacity in increments of 50 jobs. What is the maximum amount of costs that Hurley could save in 2020 by downsizing engineering support capacity? 3. Hurley, in fact, does not eliminate any of its unused engineering support

1. Calculate the amount and cost of unused engineering support capacity at the beginning of 2020, based on the number of jobs actually done in 2020. 2. Suppose Hurley can add or reduce its engineering support capacity in increments of 50 jobs. What is the maximum amount of costs that Hurley could save in 2020 by downsizing engineering support capacity? 3. Hurley, in fact, does not eliminate any of its unused engineering support

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The Knot manufactures men’s neckwear at its Spartanburg plant. The Knot is considering implementing a JIT production system. The following are the estimated costs and benefits of JIT production: a. Annual additional tooling costs $250,000 annually. b. Average inventory would decline by 80% from the current level of $1,000,000. c. Insurance, space, materials-handling, and setup costs, which currently total $400,000 annually, would decline by 20%. d. The emphasis on quality inherent in JIT production would reduce rework costs by 25%. The Knot currently incurs $160,000 in annual rework costs. e. Improved product quality under JIT production would enable The Knot to raise the price of its product by $2 per unit. The Knot sells 100,000 units each year. The Knot’s required rate of return on inventory investment is 15% per year. Q. Suppose The Knot implements JIT production at its Spartanburg plant. Give examples of performance measures The Knot could use to evaluate and control JIT…
The production manager of the Machining Department has submitted a proposal to do faster setups that would increase the annual capacity of the Machining Department by 9,000 units and would cost $20,000 per year. Should Denver implement the change? Show your calculations.
Rust Industrial Systems is trying to decide between two different conveyor belt systems. System A costs $276,000, has a four-year life, and requires $84,000 in pretax annual operating costs. System B costs $390,000, has a six-year life, and requires $78,000 in pretax annual operating costs. Both systems are to be depreciated straight-line to zero over their lives and will have zero salvage value. Suppose the company always needs a conveyor belt system; when one wears out, it must be replaced. Assume the tax rate is 24 percent and the discount rate is 8 percent. Calculate the EAC for both conveyor belt systems. Note: Your answers should be negative values and indicated by minus signs. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. System A System B Which conveyor belt system should the firm choose? System A System B
Hey I'm having trouble with this problem, I'm not sure if 48,000 is pv or fv also I'm not sure if what to do with annual maintenance cost either. "Esquire Company needs to acquire a molding machine to be used in its manufacturing process. Two types of machines that would be appropriate are presently on the market. Machine A could be purchased for $48,000. It will last 10 years with annual maintenance costs of $1,000 per year. After 10 years the machine can be sold for $5,000.Machine B could be purchased for $40,000. It also will last 10 years and will require maintenance costs of $4,000 in year three, $5,000 in year six, and $6,000 in year eight. After 10 years, the machine will have no salvage value. Assume an interest rate of 8% properly reflects the time value of money in this situation and that maintenance costs are paid at the end of each year. Ignore income tax considerations.Calculate the present value of Machine A & Machine B. Which machine Esquire should purchase?"
You are considering relocating your outdoor-equipment manufacturing plant and have narrowed your choices to four possible locations based on the availability of high quality labor, rail transportation, and an adequate distribution network. Based on the following costs and benefits associated with each location, use incremental analysis and IRR to choose the most cost-effective location assuming MARR = 15%. Initial cost (Year 0) Annual operations and maintenance costs (Years 1 thru 5) Annual gross benefits (Years 1 thru 5) Upload Choose a File Question 6 Portland, OR Bend, OR Boise, ID $700,000 $800,000 $600,000 500,000 800,000 Seattle, WA $1,000,000 1,000,000 400,000 1,100,000 You consider purchasing a new piece of equipment (7yr MACRS property) f 1,375,000 625,000 1,500,000 sod POLE 1-10 1
Which of the following is an example of a sunk cost? Select one: a. The firm pays to replant trees following the clear cutting of 1,000 acres during a timber harvest. b. The firm spends $20 million on heart medication research and discovers a promising drug. c. The firm replaces a piece of manufacturing equipment to maintain current manufacturing capacity. d. A bank opens a new office, and the new office leads to a decline in deposits at the bank's other offices. e. All of the above are examples of sunk costs.
The new machine would require two skilled operators (one per shift), each receiving $24.00 an hour (including benefits), and contract maintenance of $110,000 a year, and would incur power costs of $37,000 yearly. In addition, the automatic machine was expected to save at least $40,000 yearly through improved labor efficiency in other areas of the production. Certain aspects of the Viva purchase decision were difficult to quantify. First, Steven was unsure whether the tough collective-bargaining agreement his company had with the employees' union would allow him to lay off the 24 operators of the semiautomated machines. Reassigning the workers to other jobs might be easier, but the only positions needing to be filled were unskilled jobs, which paid $12.00 an hour. The extent of any labor savings would depend on negotiations with the union. Second, Steven believed that the Viva would result in even higher levels of product quality and lower defect rates than the company was now boasting.…
Analyze the following statement: Modernize the equipment without restructuring the line. This would keep one line in the traditional mode. Since we have modernized our other lines, this is currently our "oldest" line. It has the largest incidence of equipment problems. At an installed cost of $250,000 for new equipment, we can reduce our annual maintenance costs by $35,000. More importantly, productivity should increase by 5% without any increase in operating costs. The line produces nearly 800,000 units per year with a direct manufacturing cost of $5.40 (excluding materials). Although this revamping will extend the life of the line for only ten years, it is unlikely that we can put it off for more than 2 years.
[The following information applies to the questions displayed below.] Astro Co. sold 19,200 units of its only product and incurred a $43,072 loss (ignoring taxes) for the current year, as shown here. During a planning session for year 2020's activities, the production manager notes that variable costs can be reduced 50% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $142,000. The maximum output capacity of the company is 40,000 units per year. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2019 $704,640 563,712 Sales Variable costs Contribution margin Fixed costs 140,928 184,000 Net loss $ (43,072) Required: . Compute the break-even point in dollar sales for 2019. (Round your answers to 2 decimal places.) Contribution Margin Per Unit Current Year $ 0.00 Contribution Margin Ratio Choose Numerator: Choose Denominator: Contribution Margin Ratio Contribution margin ratio…
Whispering Winds Company manufactures automobile components for the worldwide market. The company has three large production facilities in Virginia, New Jersey, and California, which have been operating for many years. Brett Harker, vice president of production, believes it is time to upgrade operations by implementing computer-integrated manufacturing (CIM) at one of the plants. Brett has asked corporate controller Connie Carson to gather information about the costs and benefits of implementing CIM. Carson has gathered the following data: Initial equipment cost $ 6,174,000 Working capital required at start-up $ 600,000 Salvage value of existing equipment 76,350 Annual operating cost savings 855,120 Salvage value of new equipment at end of its useful life 203,600 Working capital released at end of its useful life 600,000 Useful life of equipment 10 years Whispering Winds Company uses a 12% discount rate. Click here to view the factor table $ $ $ $
In 2021, Roger sold 1,500 units at P500 each. Variable expenses were P300 per unit, and fixed expenses were P160,000. The same selling price is expected for 2022. Roger's variable cost per unit will rise by 10% in 2022 due to increasing material costs, so they are tentatively planning to cut fixed costs by P10,000. Logan must sell in 2022 to maintain the same income level as 2021 would be units (nearest whole number)
Wildhorse Corporation is considering a eliminating a department that has incurred losses over the past several years. The department has a contribution margin of $46000 per year. The fixed costs charged to the department total $49000, $30000 of the fixed costs is avoidable. If the department is eliminated, what would be the effect on the corporation's operating income? $49000 decrease $30000 increase $16000 decrease O $19000 increase Save for Later Attempts: 0 of 1 used Submit Answer