What is the answer to question number 33, 34 and 35? Provide a solution. Use the following data for the next three questions:Refrigerant, Inc. is considering a change in its plant layout. The controller hascompiled the following estimates for analysis.Chapter 8 Differential Cost Analysis1. Machine moving and reinstallation will cost P60,0002. Total sales will increase by P200,000. The average variable costs rate is P60%of sales.3.Work-in-process inventory will decrease by P100,000 and finished goodsinventory will decrease by P200,000. The annual inventory carrying cost is10% of inventory value.33. What is the increase in the contribution margin?a. P320,000b. P200,000c. P120,000d. P80,00025134. What is the reduction in inventory carrying costs because of the change in the plant layout?a. P30,000b. P100,000c. P200,000d. P300,00035. What is the net benefit in the first year associated with the change in the plant layout?a. P30,000b. P50,000c. P80,000d. P40,000

1. Contribution Margin: (Step 2) In simple words, Contribution margin shows you the aggregate amount…

33. What is the increase in the contribution margin? a. P320,000 b. P200,000 c. P120,000 d. P80,000 34. What is the reduction in inventory carrying costs because of the change in the plant layout? a. P30,000 b. P100,000 c. P200,000 d. P300,000 35. What is the net benefit in the first year associated with the change in the plant layout? a. P30,000 b. P50,000 c. P80,000 d. P40,000

33. What is the increase in the contribution margin? a. P320,000 b. P200,000 c. P120,000 d. P80,000 34. What is the reduction in inventory carrying costs because of the change in the plant layout? a. P30,000 b. P100,000 c. P200,000 d. P300,000 35. What is the net benefit in the first year associated with the change in the plant layout? a. P30,000 b. P50,000 c. P80,000 d. P40,000

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

Chapter11: Linear Optimization Models

Section: Chapter Questions

Problem 10P: The management of Hartman Company is trying to determine the amount of each of two products to...

See similar textbooks

Similar questions

The management of Hartman Company is trying to determine the amount of each of two products to produce over the coming planning period. The following information concerns labor availability, labor utilization, and product profitability: a. Develop a linear programming model of the Hartman Company problem. Solve the model to determine the optimal production quantities of products 1 and 2. b. In computing the profit contribution per unit, management does not deduct labor costs because they are considered fixed for the upcoming planning period. However, suppose that overtime can be scheduled in some of the departments. Which departments would you recommend scheduling for overtime? How much would you be willing to pay per hour of overtime in each department? c. Suppose that 10, 6, and 8 hours of overtime may be scheduled in departments A, B, and C, respectively. The cost per hour of overtime is 18 in department A, 22.50 in department B, and 12 in department C. Formulate a linear programming model that can be used to determine the optimal production quantities if overtime is made available. What are the optimal production quantities, and what is the revised total contribution to profit? How much overtime do you recommend using in each department? What is the increase in the total contribution to profit if overtime is used?
APPLY THE CONCEPTS: Effect of Changes to Sales Price, Variable Costs and Fixed Costs Now consider each of the following scenarios for Gordon Products. Calculate the contribution margin (CM) per unit, rounded to nearest dollar, and the new break-even point in units, rounded to the nearest whole unit, for each scenario separately. Scenario 1 Scenario 2 Scenario 3 Gordon will dispose of a machine in the factory. The depreciation on that equipment is $500 per month. After some extensive market research, Gordon has determined that a sales price increase of $2 per unit will not affect the sales volume and will be effective immediately. Gordon has been experiencing quality problems with a materials supplier. Changing suppliers will improve the quality of the product but will cause direct materials costs to increase by $1 per unit. CM per unit: $fill in the blank e2f800fbc041002_1 CM per unit: $fill in the blank e2f800fbc041002_2 CM per unit: $fill in the blank e2f800fbc041002_3…
Rooney Company is considering adding a new product. The cost accountant has provided the following data: Expected variable cost of manufacturing $ 49 per unit Expected annual fixed manufacturing costs $ 68,000 The administrative vice president has provided the following estimates: Expected sales commission $ 3 per unit Expected annual fixed administrative costs $ 52,000 The manager has decided that any new product must at least break even in the first year. Required Use the equation method and consider each requirement separately. If the sales price is set at $67, how many units must Rooney sell to break even? Rooney estimates that sales will probably be 10,000 units. What sales price per unit will allow the company to break even? Rooney has decided to advertise the product heavily and has set the sales price at $72. If sales are 7,000 units, how much can the company spend on advertising and still break even?
CleanTech manufactures equipment to mitigate the environmental effects of waste. (a) If Product A has fixed expenses of $15,000 per year and each unit of product has a $0.20 variable cost, and Product B has fixed expenses of $5000 per year and a $0.50 variable cost, at what number of units of annual production will A have the same overall cost as B? (b) As a manager at CleanTech what other data would you need to evaluate these two products?
Use the following information for the next 2 questions (8 & 9). Division X produces and sells a product to external and internal customers. Per-unit information about its operations include: Selling price per unit to external customers $250 Variable manufacturing costs per unit 115 Fixed manufacturing overhead costs per unit 70 8. If X is operating at capacity and has unlimited external customer demand, what should be the minimum transfer price? 9. If X has sufficient excess capacity to meet internal demand, what should be the minimum transfer price?
The next two questions are based on the following data: Yellow Company is considering the introduction of a new product line. The following information has been assembled about the line: Expected annual sales in units Investment required Production costs: Variable cost of production Fixed manufacturing overhead Selling and administrative.costs: Variable (freight & commissions) Fixed (total) 60,000 P1,000,000 15 P 300,000 P. 1 P 200,000 24. The company requires a 20% return on inveştment on all product lines. The compay uses the absorption costing method to pricing. The markup needed to achieve tihe desired ROI would be (to the nearest tenth of a percent): 20.0% C. 39.2% d. 46.0% а. b. 38.3%
Assume that the operations manager of a small semi-conductor manufacturer wants to run a Simulation model to better understand the uncertainties related to cost and demand for a particular product. He assumes that the total cost per month could be anywhere between $150,000 and $200,000 with equal likelihood. He also assumes that the demand is normally distributed with a mean of 5,000 items per month and a standard deviation of 1,000. Each item is sold for $95. a) Use the random numbers in the following table to simulate the costs, revenues and profits per month. Use Random Number A to generate the costs and Random Number B to generate the revenues per month and then calculate the profit as the difference between revenues and costs. Complete the table by reporting the minimum, maximum and average profit per month according to this simulation. Trial 1 2 3 4 5 6 7 8 9 10 you b) Can Random A 0.23 you 0.04 0.14 0.07 0.03 0.67 0.26 0.03 0.83 0.32 Cost Random B 0.75 0.89 0.82 0.33 0.96 0.67…
Manufacturing costs for product X include direct materials $18 per unit, direct labor $4 per unit, variable overhead $2 per unit, and fixed overhead $3 per unit, for a total of $27 per unit. If production volume is increased by 10 units, how much will total manufacturing costs change in the short term? Assume that the new production volume is in the relevant range. (hint: the total cost equation might be useful here) increase by $240 not enough information need to know the original volume increase by $220 increase by $250 O increase by $270
The following are data from a production, calculate; a. The Break-even point in terms of sales value and in units. b. The production demand is at 20,000 units. What is the current production profit? c. If the management decides to lower down its selling price by 50% given the same demand, will this be a sound decision? Justify. Monthly Fixed Factory Overhead Cost = P600,000 Monthly Fixed Selling Overhead Cost = P120,000 Variable Manufacturing Cost per Unit = P220 Variable Selling Cost per Unit = P30 Variable Distribution Cost per Units = P50 Selling Price per unit = P400
Below information were provided to you in order to analyze and solve below questions; Monthly Fixed Factory Overhead Cost = P250,000 Monthly Fixed Selling Overhead Cost = P50,000 Variable Manufacturing Cost per Unit = P80 Variable Selling Cost per Unit = P20 Selling Price per unit = P120 Determine the Break-even point in terms of sales value and in units. b. How many units must be sold to earn a profit of P100,000? The management plan to increase both the selling price and variable cost by 5%. What is the new Breakeven point? a. с.
Alba Company is considering the introduction of a new product. To determine the selling price of this product, you have gathered the following information: • Direct material cost per unit Direct labor cost per unit • Variable manufacturing cost per unit Total fixed manufacturing costs.. • Variable selling and administration cost per unit Total fixed selling and administration costs.. .$3,000 .$2,250 ..S1,000 .S1,750,000 ..$1,250 .$550,000 If the company requires a rate of return 18% on its investments and $6,000,000 investments are needed. The total direct materials to be used in the production is $3,000,000. Required: 1. If the company uses absorption costing approach to cost-plus pricing, compute: a. The unit product cost. b. The markup percentage. c. The selling price per unit. 2. Assume that the company is considering the introduction of other new product. If the target-selling price per unit is $5,500 and the company investing $5,000,000 to purchase equipment needed produce 500…
Newton Company manufactures and sells one product. The company assembled the following projections for its first year of operations: Variable costs per unit: Manufacturing: Direct materials $ $ 20 Direct labor 16 Variable manufacturing overhead Variable selling and administrative Fixed costs per year: 4 $ 2 Fixed manufacturing overhead Fixed selling and administrative $450,000 $ 70,000 expenses During its first year of operations Newton expects to produce 25,000 units and sell 20,000 units. The budgeted selling price of the company's only product is $66 per unit.