base capacity (in labor hours)
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The Patience Corporation operates six days a week (Monday – Saturday) on a two-eight hour
shifts. The plant which can complete ten (10) units per hour is closed twelve working days each
year for holidays, machines are repaired, oiled and cleaned for about 616 hours during the period.
Normal sales demand for its products averages 40,000 units a year over a five-year period. The
expected sales volume for the year is 35,000 units. The fixed costs amount to P210,000 per year.
REQUIRED:
1. Determine the base capacity (in labor hours) for each of the following: (a) maximum
capacity; (b) practical capacity; (c) normal capacity; (d) expected actual capacity
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- A firm orders on average 400 wheels each month. Demand is normally distributed with standard deviation of the monthly demand being 20 wheels. The ordering cost is $8 per order. The cost to buy one wheel is $4 per wheel. Annual carrying costs are 50% of unit cost. The supplier lead time is 2 operating days. The firm operates 240 days per year, in other word, the firm operates 20 days each month. Each order is received from the supplier in a single delivery. There are no quantity discounts. Write your answer and then Round your answer up to the nearest number for future calculation. (e.g 9.6 => 10). Please clearly write down the formulation and calculation for your answers. Note: Here I make the time measures bolded for you to make you pay the attention to their differences. Please notice the difference in times measure units, so that you do not make mistake by doing calculations with different time measures. You need to convert the data to the same time measures before doing any…Sherman Company provides services in the retail flooring industry. The following information is available for 20x5: Twenty percent of the firm's services are for cash and the remaining 80% are on account. Of the credit services, 40% are collected in the month that the service is provided, with the remaining 60% collected in the following month. Services provided in January are expected to total $250,000 and grow at the rate of 5% per month thereafter. January's cash collections are expected to be $240,400, and month-end receivables are forecast at $120,000. Monthly cash operating costs and depreciation during the first quarter of the year are approximated at $250,000 and $15,000, respectively. Sherman's December 31, 20x4 balance sheet revealed accounts payable balances of $28,000. This amount is related to the company's operating costs and is expected to grow to $36,000 by the end of 20x5's first quarter. All operating costs are paid within 30 days of incurrence. Company policy…The Engine Division of Murphy Motor Corporation uses 5,000 carburetors per month in its production of automotive engines. It presently buys all of the carburetors it needs from two outside suppliers at an average cost of $100. The Carburetor Division of Murphy Motor Corporation manufactures the exact type of carburetor that the Engine Division requires. The Carburetor Division is presently operating at its capacity of 15,000 units per month and sells all of its output to a foreign car manufacturer at $106 per unit. Its cost structure (on 15,000 units) is: Variable production costs $70 Variable selling costs 10 All fixed costs 10 Assume that the Carburetor Division would not incur any variable selling costs on units that are transferred internally. Refer to Murphy Motor Corporation. What is the minimum of the transfer price range for a transfer between the two divisions?
- Balcom Enterprises is planning to introduce a new product that will sell for $120 a unit. Manufacturing cost estimates for 28,000 units for the first year of production are: Direct materials $1,372,000. Direct labor $1,008,000 (based on $18 per hour × 56,000 hours). Although overhead has not be estimated for the new product, monthly data for Balcom's total production for the last two years has been analyzed using simple linear regression. The analysis results are as follows: Dependent variable Factory overhead costs Independent variable Direct labor hours Intercept $ 136,000 Coefficient on independent variable $ 5.00 Coefficient of correlation 0.959 R2 0.846 Based on this information, how much is the variable manufacturing cost per unit, using the variable overhead estimated by the regression (assuming that direct materials and direct labor are variable costs)? Multiple Choice $72 $92 $95 $77ABC Corporation resells one type of candle. It has 250 working days. Each day, it sells an average of 500 boxes but may sometimes sell a maximum of 600 boxes. The supplier takes an average of 5 days to deliver the order. During busier times, the supplier may take 7 days.Based on ABC’s records, ordering cost average P400 per order. Storage cost per box average P5 per year. There is also an opportunity cost of 1% per year for every peso invested in inventories. Each box of candles costs P450.If ABC would continue its current inventory management policy, it would keep 10,000 boxes as safety stock and order tendays-worth of inventory.(A) Reorder Point1. What should be the reorder point in boxes?2. How much would the normal lead time usage be?3. How much should ABC keep as safety stock?PepsiCo sells its soft drinks in approximately 400,000 retail establishments, such as supermarkets, discount stores, and convenience stores. Sales representatives call on each retail account weekly, which means each account is called on by a sales rep 52 times per year. The average length of a sales call is 75 minutes (or 1.25 hours). An average salesperson works 2,000 hours per year (50 weeks per year * 40 hours per week), but each spends 10 hours a week on non-selling activities, such as administrative tasks and travel. How many salespeople does PepsiCo need?
- Wet Pets Inc. makes 100-gallon plexiglass aquariums. They reported the following financial information for last year: Direct labor: 6,600 hours @ $20 per hr Production manager salary: $55,000 Factory rent: $26,400 Equipment maintenance: $11,000 (considered a variable expense) Equipment depreciation: $11,000 Production for the year: 12,000 units Total Revenue: $1,100,000 Total aquariums sold during the period: 10,000 units Operating Income under absorption costing (after non-production expenses): $224,400 Assume that the fixed costs were the same on a per-unit basis during the prior period. What would Operating Income be under variable costing? (Round per-unit costs to the nearest cent.) Select one: O a. $209,000 b. $207,166 c. None of these options are correct. OO O d. $239,800 O e. $241,626Can someone help me figure out this problem ? Pretty Lady Cosmetic Products has an average production process time of 40 days. Finished goods are kept on hand for an average of 15 days before they are sold. Accounts receivable are outstanding an average of 35 days, and the firm receives 40 days of credit on its purchases from suppliers. Estimate the average length of the firm's short-term operating cycle. How often would the cycle turn over in a year? A. 90 days and 4.06 times B. 80 days and 4.06 times C. 70 days and 3.06 times D. 90 days and 3.06 timesHello Company makes three different products. Due to the constraints of their manufacturing equipment and warehouse facility, the company is only able to produce, store, and sell a total of 50,000 units each month. The production of Products A and B varies each month; however, Product C is a special order for one customer who purchases the same number of units every month. Pete Davila, the CEO, has |provided the following data from last month for each product. Income Statement Product A Product B Product C Мax Cарacity 5,000 8.00 $ 2.00 $ Units 43,000 10.00 $ 3.00 $ 20,000 $ 2,000 50,000 Price per unit Variable expense per unit $ $ $ 50.00 15.00 $ 20.00 Total Fixed Costs 40,000 $ 10,000 Product Sales $ 430,000 $ 40,000 $ 100,000 $ 570,000 (169,000) 401,000 (70,000) 331,000 Variable Costs (129,000) (10,000) 30,000 $ (30,000) 70,000 $ Contribution Margin $ 301,000 $ Fixed Costs (20,000) 281,000 (40,000) (10,000) (10,000) 60,000 $ Operating income (loss) Required Using the Data Table…
- A Swiss Interior Company produces and sells lamps that are sold usually all year round. The company has a maximum production capacity of 100,000 units per year. Operating at normal capacity, the business earned Operating Income of $600,000 in 2020. The following cost data has been prepared for the year ended December 31, 2020. 1. Calculate The Swiss Interior Company’s break-even point in units and in sales dollars. 2. Assuming sales equal to the normal capacity of the business, prepare a contribution margin income statement for the year ended December 31, 2020, detailing the components of total variable costs and total fixed costs, and clearly showing contribution and net income.Cherboneau Novelties produces drink coasters (among many other products). During the current year (year 0), the company sold 522,000 units (packages of 6 coasters). In the coming year (year 1), the company expects to sell 544,000 units, and, in year 2, it expects to sell 648,000 units. The target ending finished goods inventory for each month is equal to the next month's sales. However, because of production issues, the ending inventory in the current year is expected to be only 13,000 units. Each unit requires 0.5 pound of cork. At the end of the current year, management expects to have 19,250 pounds of cork in inventory. Management has set a target to have cork on hand equal to one half of next month’s sales requirements. Sales and production take place evenly throughout the year. Required: a. Compute the total targeted production of the finished coaster for the coming year. b. Compute the required amount of cork to be purchased for the coming year. (540,000 units for a is incorrect…
