A rotational molding operation has fixed costs of $10,000 per year and variable costs of $52 per unit. If the process is automated via conveyor, its fixed cost will be $43,000 per year, but its variable cost will be only $10 per unit. Determine the number of units each year necessary for the two operations to break even. The number of units each year necessary for the two operations to break even, (in units) Round to the nearest two (2) decimal places

A rotational molding operation has fixed costs of $10,000 per year and variable costs of $52 per unit. If the process is automated via conveyor, its fixed cost will be $43,000 per year, but its variable cost will be only $10 per unit. Determine the number of units each year necessary for the two operations to break even. The number of units each year necessary for the two operations to break even, (in units) Round to the nearest two (2) decimal places

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter13: The Balanced Scorecard: Strategic-based Control

Section: Chapter Questions

Problem 8E: Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its...

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Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its products is 65 minutes per unit. The budgeted conversion costs for the manufacturing cell dedicated to the product are 12,960,000 per year. The total labor minutes available are 1,440,000. During the year, the cell was able to produce 0.6 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs. Required: 1. Compute the theoretical conversion cost per unit. 2. Compute the applied conversion cost per minute (the amount of conversion cost actually assigned to the product). 3. Discuss how this approach to assigning conversion cost can improve delivery time performance. Explain how conversion cost acts as a performance driver for on-time deliveries.
A rotational molding operation has fixed costs of $6.000 per year and variable costs of $54 per unit. If the process is automated via conveyor, its fixed cost will be $39,000 per year, but its variable cost will be only $10 per unit. Determine the number of units each year necessary for the two operations to break even. The number of units each year necessary for the two operations to break even is determined to be
Explain the computation needed. We have been producing product A for several years and look forward to several more years of sales at 500,000 units per year or 2,000 units per day. The present method requires a standard time of 2.0 mins per unit or 30 pcs per hour. At this rate, it takes 33.33 hrs to make 1,000 units. All production will run on the day shift. Present Method and Costs- with a labor rate of $10.00/hr, the labor cost will be $333.30 to produce 1,000 units. The cost of 500,000 units per year would be $166,650.00 in direct labor. New Method and Cost- we have a reduction idea. If we buy this new machine attachment for $1000, the new time standard would be lowered to 1.5 minutes per unit. Will this investment be good for us?
i need to find the average cost per unit? if : the machine to produce the units cost $400,000 the monthly operating and maintenance cost is: $1,000 cost of material and labour is: $60/unit defective unit at a cost: $60/unit nominal production of: 2,800 units/month nominal defect rate: 3% MARR is 10% compounded monthly period of time 5 years
Process A has a fixed cost of $160,000 per year and a variable cost of $50 per unit. For Process B, 10 units can be produced in 1 day at a cost of $200. If the company’s MARR is 10% per year, what will the annual fixed cost have to be for Process B in order for the two alternatives to have the same annual total cost at a production rate of 1000 units per year?
Suppose that a manufacturer plans to produce 78,000 units of product duringa year. A lot of size L, to be determined, is to be made periodically, andevery time a lot is made, it is necessary to set up the appropriate machineryand other production facilities before production starts. The set up cost is thena fixed cost incurred for each lot produced and it is determined as $ 200. Whenproduction commences , the cost of making a unit is constant at $ 7.5 per unit.Inventory cost is to be determined on the basis that it costs $ 0.50 per year tocarry one unit in inventory. Also find how many lots the manufacturerwould make per year and each lot would be produced in how manydays ?.
Nestle Ltd. produces its premium plant food in 50 Kg bags. Demand is 100,000 Kgs. per week and the plant operates 52 weeks each year. Nestle can produce 250,000 Kgs. per week. The setup cost is OMR 200 and the annual holding cost rate is OMR 0.550 per bag. What is the optimal total cycle time including the production time in year?
ETS manufactures a component for its computer products. The annual demand for thiscomponent is 2500 units. The annual cost of maintaining inventory is10% per unit and the cost of preparing an order and setting up productionfor the order is $ 50.The machine used to make this part has a production rate of 10,000units per year and the cost is $ 22 per unit.a. Find the EPQ(Economic Production Quantity)A. How long does it take to produce the batch?B. How many batches will be produced per year?C. What is the maximum inventory level?D. What is the total cost per year?E. A supplier offers to sell a similar component for $ 25 per unit with a charge$ 5 per service per order. Should the company accept the offer?F. Find the average inventory level for each situation
Two manufacturing processes are being considered for making a new product. Process #1 is less capital intensive, with fixed costs of $50,000 per year and variable costs of $700 per unit. Process #2 has fixed costs of annually, with variable costs of $200 per unit. What is the break-even quantity for the two processes? If annual sales are expected to be 600 units, which process should be selected? If lowest overall costs per year is your overall objective, for what range of annual production quantities should you select Process #1? Process#2? Operations and Engineering have found a way to reduce the cost of process #2, such that the fixed costs for this process decrease from $400,000 to $300,000 annually. All other costs remain the same (process #1 fixed = $50,000/year process #1 variable = $700/unit, Process #2 variable = $200/unit). What was the new break even quantity between the two processes? Does this change the process selection for the annual sales volume of 600 units? If so,…
Amanufacturermakes 7,900,000 memory chips per year. Each chip takes 0.4minutes of direct labor at the rate of $8 per hour. The overhead costs are estimated at $11 per direct labor hour. A new process will reduce the unit production time by 0.01 minutes. If the overhead cost will be reduced by $5.50 for each hour by which total direct hours are reduced, what is the maximum amount you will pay for the new process? Assume that the new process must pay for itself by the end of the first year. (a) $25,017 (b) $1,066,500 (c) $10,533 (d) $17,775 (e) $711,000.
There are currently 5 docks at the UPS port facility and it takes 3.7 hours to process a truck. The facility operates 15 hours a day 365 days a year. During a year they expect 4500 trucks. The current operational costs are $56K per dock per year. The waiting costs are estimated at $80 per day. UPS wants to determine if eliminating one dock will reduce or increase total costs. Answer the following. Complete all calculations with at least 2 decimal points. What is the arrival rate per day? What are the WCe when there are 5 docks? What are the RCe when there are 5 docks? What are the ICe when there are 4 docks? How many docks should UPS have to minimize total costs?
Machine A has a fixed cost of P40,000 per year and a variable cost of P6 per unit. Machine B has an unknown fixed cost but with this process, 250 units can be produced each month at a total variable cost of P2,000. If the total costs of the two machines break-even at a production rate of 2000 units per year, what is the total fixed cost of Machine B?