Benchmarking The call center of Wobegon Electric Company handles 1.32 million calls per year. The average call requires six minutes of operator time, and 40 percent of the calls require a supervisor to be involved for at least half of the call time. Operators are paid $9 per hour, and supervisors are paid $15 per hour. After Wobegon Electric engaged in process benchmarking, call times were reduced by one minute, and the number of supervisor-involved calls were reduced by 15 percent. The benchmarking study cost Wobegon Electric Company $220,000. c. If the new results are expected to continue for three years, was engaging in the benchmarking study profitable to Wobegon Electric Company? Benchmarking study resulted in a $______________ net savings.

Strategic Cost Management (Activity Based Costing)  Inspection time for a plant is 10,000 hours per year. The cost of inspection consists of salaries of four inspectors, totaling P60,000. Inspection also used supplies costing P3 per inspection hour. The company has a close to zero defect state and has eliminated the need for any inspection activity.   Calculate the nonvalue-added cost of inspection per year. Strategic Cost Management (Activity Based Costing)  Inspection time for a plant is 10,000 hours per year. The cost of inspection consists of salaries of four inspectors, totaling P60,000. Inspection also used supplies costing P3 per inspection hour. The company has a close to zero defect state and has eliminated the need for any inspection activity.   Calculate the nonvalue-added cost of inspection per year.

A company's returns department incurs annual overhead costs of $333,000 and budgets 9,000 returns per year. Management believes it has found a better way to package its products. As a result, the company expects to reduce the number of shipments that are returned due to damage by 6%. This is expected to reduce the department's annual overhead by $16,000. Compute the department's standard overhead rate per return (a) before the sustainability improvement and (b) after the sustainability improvement. (Round your answers to 2 decimal places.) Before Sustainability Improvement After Sustainability Improvement Standard overhead rate per retum

A manufacturing firm maintains one product assembly line to produce generators. The demand for the product is 85 units/week.The production runs at 8 hours/day, 5.5 days/week. What is the maximum production time per unit in hours required of the production line to meet the demand. Show complete solution on a clear paper.

The overhead costs for a company are presently $Xper month. The management team of the company, in cooperation with the employees, is ready to implement a comprehensive improvement program to reduce these costs. If you (a) consider an observation of actual overhead costs for one month analogous to an output unit, (b) estimate the overhead costs for the first month of program implementation to be 1.15Xdue to extra front-end effort, and (c) consider a 90% improvement curve applicable to the situation, what is your estimate of the percentage reduction in present overhead costs per month after 30 months of program implementation?

Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five-year period. His annual pay raises are determined by his division’s return on investment (ROI), which has exceeded 18% each of the last three years. He has computed the cost and revenue estimates for each product as follows:     Product A Product B Initial Investment     Cost of equipment (salvage value) 170000 380000 Annual revenues and costs     Sales revenue 250000 350000 Variable expenses 120000 170000 Depreciation expense 34000 76000 Fixed out-of-pocket operating costs 70000 50000   The company’s discount rate is 16%.   Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor using tables.   Required: 1. Calculate the payback period for each product. 2. Calculate the net present value for each product. 3. Calculate the internal rate of return for each product. 4. Calculate the project…

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A telephone call center uses two customer service representatives (CSRs) during the 8:30 a.m. to 9:00 a.m. time period. The standard service rate is 3.0 minutes per telephone call per CSR. Assuming a target labor utilization rate of 70 percent, how many calls can these two CSRs handle during this half-hour period? Round your answer to the nearest whole number.    calls

Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five-year period. His annual pay raises are determined by his division’s return on investment (ROI), which has exceeded 23% each of the last three years. He has computed the cost and revenue estimates for each product as follows:   Product A Product B Initial investment:     Cost of equipment (zero salvage value) $ 300,000 $ 500,000 Annual revenues and costs:     Sales revenues $ 350,000 $ 450,000 Variable expenses $ 160,000 $ 210,000 Depreciation expense $ 60,000 $ 100,000 Fixed out-of-pocket operating costs $ 80,000 $ 61,000 The company’s discount rate is 16%.   Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor using tables.   Required: 3. Calculate the internal rate of return for each product. 4. Calculate the profitability index for each product. 5. Calculate the simple rate of return for…

Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five-year period. His annual pay raises are determined by his division’s return on investment (ROI), which has exceeded 23% each of the last three years. He has computed the cost and revenue estimates for each product as follows:     Product A Product B Initial investment:     Cost of equipment (zero salvage value) $ 300,000 $ 500,000 Annual revenues and costs:     Sales revenues $ 350,000 $ 450,000 Variable expenses $ 160,000 $ 210,000 Depreciation expense $ 60,000 $ 100,000 Fixed out-of-pocket operating costs $ 80,000 $ 61,000   The company’s discount rate is 16%.   Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor using tables.   Required: 1. Calculate the payback period for each product. 2. Calculate the net present value for each product. 3. Calculate the internal rate of return for each…