4. A plant manager considers the operational cost per hour of five machine alternatives.The cost per hour is sensitive to three potential weather conditions: cold, mild, andwarm. The following table represents the operations cost per hour for each alternative-state of nature combination:Alternatives Cold cost/day Mild cost/day Warm cost/dayMachine 1$45$35$40Machine 2$40$37$42Machine 3$35$30$48Machine 4Machine 5$55$40$20$35Using the optimistic criterion, which alternative is best?$44$40

Introduction: Optimistic criterion is a technique used for making decision under uncertainty. Under…

Answered: 4. A plant manager considers the…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A manager must decide which type of machine to buy, A, B, or C. Machine costs (per individual machine) are as follows: Machine Cost A $ 60,000 B $ 50,000 C $ 60,000 Product forecasts and processing times on the machines are as follows: PROCCESSING TIME PER UNIT (minutes) Product AnnualDemand A B C 1 16,000 3 4 4 2 10,000 6 5 1 3 15,000 1 3 6 4 17,000 5 3 4 a. Assume that only purchasing costs are being considered. Compute the total processing time required for each machine type to meet demand, how many of each machine type would be needed, and the resulting total purchasing cost for each machine type. The machines will operate 10 hours a day, 240 days a year. (Enter total processing times as whole numbers. Round up machine quantities to the next higher whole number. Compute total purchasing costs using these rounded machine quantities. Enter the resulting total purchasing cost as a whole number. Omit the "$" sign.) Total…
Two separate processes are being considered for manufacturing a product. Process A has fixed costs of $12,000 and variable costs of $6 per unit. Process B has fixed costs of $16,000 and variable costs of $4 per unit. a. What is the break-even quantity for the two processes (Show your work)? b. Which process would be more cost-effective for producing 1,000 units? c. Which process would be more cost-effective for producing 3,000 units?
A four-year investment requires annual deposits of $300 at the beginning of each year. The deposits earn 9% per year. What is the investment's future value? Remember, the deposits are made at the beginning of each year (annuity due). A four-year investment requires annual deposits of $300 at the beginning of each year. The deposits earn 9% per year. What is the investment's future value? Remember, the deposits are made at the beginning of each year (annuity due). $1,495.41 $1,459.98 $1,425.22 $1,391.12 $ 1,357.69
In a manufacturing process, 70% of parts produced are good parts, while 30% of parts are sent to a rework station. 80% of parts coming from the rework station are good parts, while 20% are scrapped. Suppose that manufacturing cost per unit is 200 TL/unit in the initial process and 250 TL/unit in the rework station. a) Determine the cost per good unit. Cost/Good Unit = Initial Process Rework Process b) If a quality improvement program is implemented, 90% of parts produced become good parts (a change from 70% to 90% is achieved). 10% of parts are sent to the rework station, where again a quality improvement (QI) program is implemented, and the percent of good parts is increased from 80% to 90% and only 10% are scrapped. Determine the manufacturing cost per good unit after the quality improvement. Cost/Good Unit After QI= c) Determine the % increase in productivity and % decrease in cost/good unit due quality improvement. % Increase in Productivity= % Decrease in Cost = 2
Choose the best
Below are details of the four products made by Krane Ltd. A B C D Selling price per unit 60 80 100 120 Variable cost per unit 24 36 48 50 Machine time per unit 3 4 6.5 8 Weekly demand for all products is the same. Unfortunately, time available on the machine used to produce all four products is likely to be reduced in the coming week due to maintenance work required. If output of one of the products needs to be restricted and management want to lose as little profit as possible, which of the product line’s outputs should they restrict? Product A Product B Product C Product D
Are the fixed costs as well as the 'other variable costs" included in the calculations of total overhead?
Gerber Clothing Inc. has designed a rain suit for outdoor enthusiasts that is about to be introduced on the market. A standard cost card has been prepared for the new suit, as follows: Standard Quantity or hours Standard price or Rate Standard Direct materials 2.2 metres Direct labour 1.0 hours Manufacturing overhead (1/6 variable) 1.0 hours $ 15 per metre 33 per hour 21 per hour Cost $33.00 Total standard cost per suit 33.00 21.00 $87.00 a. The only variable selling and administrative costs will be $6 per suit for shipping. Fixed selling and administrative costs will be as follows (per year): Salaries Advertising and other Total $ 35,400 157,000 $192,400 b. Since the company manufactures many products, it is felt that no more than 10,500 hours of labour time per year can be devoted to production of the new suits. c. An investment of $550,000 will be necessary to carry inventories and accounts receivable and to purchase some new equipment. The company wants a 20% ROI in new product…
The grinding machines are potentially the constraint in the production facility. A total of 52,400 minutes are available per month on these machines. Direct labor is a variable cost in this company. How many minutes of grinding machine time would be required to satisfy demand for all four products? A.23,940 B.5,200 C.52,400 D.17,190
Vermont Instruments manufactures two models of calculators. The fiancé model is the Fin-X and the scientific model is the Sc-X. Both models are assembled in the same plant and require the same assembling operations. The difference between the models is in the cost of the parts. The following data are available for June: Fin-X Sci-X Total Number of units 12,000 40,000 52,000 Parts cost per unit $25 $23 Other costs: Direct labor $53,000 Indirect materials 18,000 Overhead…
Compute Lead Time Jackson Fabricators Inc. machines metal parts for the automotive industry. Under the traditional manufacturing approach, the parts are machined through two processes: milling and finishing. Parts are produced in batch sizes of 50 parts. A part requires 5 minutes in milling and 10 minutes in finishing. The move time between the two operations for a complete batch is 11 minutes. Under the lean philosophy, the part is produced in a cell that includes both the milling and finishing operations. The operating time is unchanged; however, the batch size is reduced to 6 parts and the move time is eliminated. Determine the value-added, non-value-added, and total lead times, and the value-added ratio under the traditional and lean manufacturing methods. If required, round percentages to one decimal place. Traditional Philosophy Lean Manufacturing Philosophy Value-added time ? min ? min Non-value-added time ? min ? min Total lead time ? min ? min Value-added ratio…
A firm makes a range of running shoes. There are three models – Short; Middle; and Long distance. The products are aimed at different segments of the market. Product costs are computed using an overhead rate based on the labour hour method. Selling prices are set on full cost plus 20%. A unit refers to a pair of running shoes. The following information is available: Short distance Middle distance Long distance Direct material cost per unit $25 $35 $40 Labour hours per unit 2 hrs 2 hrs 2 hrs Labour rate per hour $12 $12 $12 Total labour hours used 120,000 hrs 24,000 hrs 16,000 hrs Total number of units 60,000 units 12,000 units 8,000 units Cost driver information: Short distance Middle distance Long distance No. of machine hours 60,000 48,000 48,000 No. of material orders 30 100 200 No. of sales orders 12 48 63 The total overhead costs for the business amount to $1.2…

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