A thermoplastic film manufacturer is trying to decide between four types of thermoforming molding processes to be added to its molding operation. The estimated costs and revenue are shown below. Compare them on the basis of rate of return and determine which process should be selected if the company's MARR is 6% per year. Alternative Vacuum Pressure Drape Free forming forming forming blowing Initial costs $31,000 $51,000 $43,000 $45,000 Annual expenses $4550 $4250 $4450 $5050 Annual revenue $8550 $12,250 $10,950 $12,050 Salvage value $3100 $5100 $1300 $4500 Life, years 8 8 8 8 IRR (%) 2.66 6.87 6.03 6.68

A thermoplastic film manufacturer is trying to decide between four types of thermoforming molding processes to be added to its molding operation. The estimated costs and revenue are shown below. Compare them on the basis of rate of return and determine which process should be selected if the company's MARR is 6% per year. Alternative Vacuum Pressure Drape Free forming forming forming blowing Initial costs $31,000 $51,000 $43,000 $45,000 Annual expenses $4550 $4250 $4450 $5050 Annual revenue $8550 $12,250 $10,950 $12,050 Salvage value $3100 $5100 $1300 $4500 Life, years 8 8 8 8 IRR (%) 2.66 6.87 6.03 6.68

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 10EB: Keleher Industries manufactures pet doors and sells them directly to the consumer via their web...

See similar textbooks

Similar questions

Keleher Industries manufactures pet doors and sells them directly to the consumer via their web site. The marketing manager believes that if the company invests in new software, they will increase their sales by 10%. The new software will increase fixed costs by $400 per month. Prepare a forecasted contribution margin income statement for Keleher Industries reflecting the new software cost and associated increase in sales. The previous annual statement is as follows:
A thermoplastic film manufacturer is trying to decide between 5 types of thermoforming molding processes to be added to its molding operation. The estimated costs and revenues are shown below. Compare them on the basis of the IRR method and determine which process should be selected if the company's MARR is 7% per year. Select the best alternative by performing an IRR incremental analysis. Justify your answer.
A thermoplastic film manufacturer is trying to decide between 8 types of thermoforming molding processes to be added to its molding operation. The estimated costs and revenues are shown below. Compare them on the basis of the IRR method and determine which process should be selected if the company's MARR is 7% per year. B C D E F G Initial Costs $13,000 $12,00o $11,000 $12,500 $16,000 $26,000 $19,500 Annual expenses $6,550 $9,125 $7,000 $8,000 $7,000 $11,000 $12,000 $13,000 Annual revenue $9,000 $10,000 $9,500 $13,500 $16,000 $16,200 Lifetime(years) 9. 9 9. 9. IRR 11.54% 6.88% 9.17% 11.81% 5.24% 4.86% 6.48% Perform an IRR-incremental analysis to find the best alternative.
Your manufacturing company is interested in developing a cost model to price a AM part that will be manufactured for production. Based on data that they have collected: Machine and ancillary equipment cost : $1,000,000 Equipment depreciation cost per year: $130,000 Machine Maintenance cost per year: $50,000 Machine operator cost per hour : $40/hr Set up and prep time for each build : 30 min Post processing time per build: 1 hr Material Cost per Kg: $275/kg Amount of material needed per part: 100mgs/part They estimate the following: a. Number of parts made per year: 60,000 b. Each build can build 200 parts simultaneously on a single platform c. Build time for each platform of 200 parts: 25 hrs d. The factory will run 24/7 for 200 days in a year. Under this scenario what will be the cost per part ?
Cox Electric makes electronic components and has estimated the following for a new design of one of its products: Fixed Cost $10,000 Material cost per unit = $0.15 Labor cost per unit = $0.10 Revenue per unit = $0.65 Show Transcribed Text Implement your model from part (b) in Excel using the principles of good spreadsheet design and find the profit if Cox Electric makes 18,000 new product. If required, round your answer to nearest whole number. For subtractive or negative numbers use a minus sign. (Example: -300)
Rundle Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,300 containers follows. Unit-level materials. Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Rundle for $2.60 each. Required a. Calculate the total relevant cost. Should Rundle continue to make the containers? b. Rundle could lease the space it currently uses in the manufacturing process. If leasing would produce $11,600 per month, calculate the total avoidable costs. Should Rundle continue to make the containers? Answer is complete but not entirely correct. $ a. Total relevant cost a. Should Rundle continue to make the containers? b. Total avoidable cost b. Should Rundle continue to make the containers? 190.650,000 Yes $24,180,000 $ 5,200 6,100 4,000 7,800…
Old Southwest Canning Co. has determined that any one of four machines can be used in a certain phase of its chili-canning operation. The first costsand annual operating costs (AOC) are estimated below, and all machines have a 5-year life. The MARR is 25% per year. (a) Determine which machine should be selected on the basis of a rate of return analysis. (b) Use a spreadsheet to perform PW analysis of each machine. Compare the machine selections with that of the ROR analysis.
Dexcon Technologies, Inc., is evaluating two alternatives to produce its new plastic filament with tribological (i.e., low friction) properties for creating custom bearings for 3-D printers. The estimates associated with each alternative are shown below. Using a MARR of 15% year, which alternative has the lower present worth? per Method DDM LS First Cost $-200,000 $-40,000 $-500,000 M&O Cost, per Year $-40,000 Salvage Value Life $2,000 $21,000 2 years 4 years The present worth for the DDM method is $ The present worth for the LS method is $ The (Click to select) v method is selected.
The manager of Liquid Sleeve Inc., a company that makes a sealing solution for machine shaft surfaces that have been compromised by abrasion, high pressures, or inadequate lubrication, is considering adding Al or Fe nanoparticles to its solution to increase the product's performance at high temperatures. The costs associated with each are shown below. The company's MARR is 20% per year. Determine which nanoparticle type the company should select using an incremental rate of return analysis. Type Fe First cost, $ -145,000 Annual operating cost, -86,000 $ per year Salvage value, $ 30,000 Life, years 2 The incremental rate of return is Select type (Click to select) ~ %. Type Al -278,000 -74,000 70,000 4
You have two machines under consideration for an improved automated wrapping process for Snickers Fun Size candy bars as detailed below. (a) Using an AW analysis, determine which should be selected at i = 15% per year. (b) Assume you want machine D to be selected and are willing to extend its estimated life, if necessary. Perform this analysis to ensure D’s selection using factors or a spreadsheet. Machine C D First cost, $ −40,000 −65,000 Annual cost, $/year −10,000 −12,000 Salvage value, $ 12,000 25,000 Life, years 3 6
Ashley Foods, Inc. has determined that only one of five machines can be used in one phase of its dairy products operation. The first and annual costs are estimated; all machines are expected to have a 4-year useful life. If the MARR is 20% per year, determine which machine should be selected on the basis of rate of return.
Noblesya Co. produces 1,000 parts per year, which are used in the assembly of one ofits products. The unit product cost of these parts are: Variable manufacturing cost,P12.00; fixed manufacturing cost, P9.00. The part can be purchased from an outsidesupplier at P20.00. If the part is purchased from the outside supplier, two thirds of thefixed manufacturing costs can be eliminated. What would be the annual impact on thecompany’s net operating income as a result of buying the part from the outside supplier? provide solution