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.

In a typical 5-day period, the operations team programs a machine to work for 94 hours. Changeovers and set-ups take 4 hours and breakdowns average 2.3 hours each week. Waiting for materials to be delivered constitutes three hours in which the machine is not working. The machine also has 2 hours a week without any work scheduled. When the machine is running, it averages 87% rated speed. After production, 1.8% of the parts processed are found to be defective.    What is the OEE to 2d.p.

HH Co. uses corrugated cardboard to ship its product to customers. Currently, the company’s returns department incurs annual overhead costs of $72,000 and forecasts 2,000 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 5%. In addition, the initiative is expected to reduce the department’s annual overhead by $12,000. Compute the returns department’s standard overhead rate per return (a) before the sustainability improvement and (b) after the sustainability improvement. Round to the nearest cent.

Resource Supply and Usage, Special Order, Relevancy Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of $22,900 and is capable of processing as many as 6,950 purchase orders per year. Each clerk uses a PC and laser printer in processing orders. Time available on each PC system is sufficient to process 6,950 orders per year. The cost of each PC system is $1,300 per year. In addition to the salaries, Elliott spends $30,024 for forms, postage, and other supplies (assuming 27,800 purchase orders are processed). During the year, 27,200 orders were processed Required: 1. Which of the resources associated with purchasing can be classified as flexible resources? Which of the resources associated with purchasing can be classified as committed resources? 2. Compute the total activity availability, and break this into activity usage and unused activity. Activity availability: purchase orders Activity usage: purchase orders Unused activity: purchase…

HH Co. uses corrugated cardboard to ship its product to customers. Currently, the company’s returns department incurs annual overhead costs of $126,000 and forecasts 6,000 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 3%. In addition, the initiative is expected to reduce the department’s annual overhead by $14,000.Compute the returns department’s standard overhead rate per return (a) before the sustainability improvement and (b) after the sustainability improvement.

Resource Supply and Usage, Special Order, Relevancy Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of $22,100 and is capable of processing as many as 6,150 purchase orders per year. Each clerk uses a PC and laser printer in processing orders. Time available on each PC system is sufficient to process 6,150 orders per year. The cost of each PC system is $1,300 per year. In addition to the salaries, Elliott spends $26,568 for forms, postage, and other supplies (assuming 24,600 purchase orders are processed). During the year, 24,000 orders were processed. Required: 1. Which of the resources associated with purchasing can be classified as flexible resources? Forms, Postage and Supplies  Which of the resources associated with purchasing can be classified as committed resources? PC system and clerks  2. Compute the total activity availability, and break this into activity usage and unused activity. Activity availability:   purchase orders…

Anchor Company manufactures a variety of tool boxes. The firm is currently operating at 80% of its full capacity of 4,650 machine- hours per month. Each unit requires 30 minutes of machine time. Its sales manager has been looking for special orders to make productive use of the excess capacity. JCL Ltd., a potential customer, has offered to buy 10,000 tool boxes at $8.30 per box, provided that the entire quantity is delivered in two months. The current per-box cost data are as follows: Direct materials Direct labour (% hour at $6.80/hour) Total manufacturing overhead Total unit product cost Both fixed and variable overhead are allocated using direct labour-hours as a base. Variable overhead is $1.70 per direct labour-hour. Without the order, Anchor would have enough business to operate at 3.720 direct labour-hours in each of the next two months. The regular selling price of the tool boxes is $11.30. A sales commission of 50 cents per unit is paid to sales representatives on all regular…

Clone Computers assembles and packages personal computer systems from brand-name components. Its Home Office PC System is assembled from components costing $1400 per system and sells for $2000. Labour costs for assembly are $100 per system. This product line's share of overhead costs is $10,000 per month. a. How many Home Office systems must be sold each month to break even on this product line? b. What will be the profit or loss for a month in which 15 Home Office systems are sold?

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 17% 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) $ 176,600 $ 390,000 Annual revenues and costs:     Sales revenues $ 260,000 $ 360,000 Variable expenses $ 124,000 $ 174,000 Depreciation expense $ 36,000 $ 78,000 Fixed out-of-pocket operating costs $ 71,000 $ 50,000   The company’s discount rate is 15%.   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…

The centralized computer technology department of Hardy Company has expenses of $320,000. The department has provided a total of 4,000 hours of service for the period. The Retail Division has used 2,750 hours of computer technology service during the period, and the Commercial Division has used 1,250 hours of computer technology service. How much should each division he charged for computer technology department services?