Blossom's Wind Toys manufactures decorative kites, banners, and windsocks. During the month of January, Blossom received orders for 4,000 Valentine's Day banners and 1,400 Easter kites. Because several sewing machines are in the shop for repairs, Blossom's has only 1,000 sewing machine hours available for production of these orders. Each Valentine's Day banner sells for $11.00. The banners take one hour to sew and have a total variable cost of $9.00 per banner. The Easter kites sell for $15.00. They take 30 minutes to sew and have a total variable cost of $11.00. (a) With only 1,000 sewing machine hours available, how many units should Blossom produce for the below items? Kites Banners

Blossom's Wind Toys manufactures decorative kites, banners, and windsocks. During the month of January, Blossom received orders for 4,000 Valentine's Day banners and 1,400 Easter kites. Because several sewing machines are in the shop for repairs, Blossom's has only 1,000 sewing machine hours available for production of these orders. Each Valentine's Day banner sells for $11.00. The banners take one hour to sew and have a total variable cost of $9.00 per banner. The Easter kites sell for $15.00. They take 30 minutes to sew and have a total variable cost of $11.00. (a) With only 1,000 sewing machine hours available, how many units should Blossom produce for the below items? Kites Banners

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 6E: Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of...

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Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of 25,750 and is capable of processing as many as 6,500 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 6,500 orders per year. The cost of each PC system is 1,100 per year. In addition to the salaries, Elliott spends 27,560 for forms, postage, and other supplies (assuming 26,000 purchase orders are processed). During the year, 25,350 orders were processed. Required: 1. Classify the resources associated with purchasing as (1) flexible or (2) committed. 2. Compute the total activity availability, and break this into activity usage and unused activity. 3. Calculate the total cost of resources supplied (activity cost), and break this into the cost of activity used and the cost of unused activity. 4. (a) Suppose that a large special order will cause an additional 500 purchase orders. What purchasing costs are relevant? By how much will purchasing costs increase if the order is accepted? (b) Suppose that the special order causes 700 additional purchase orders. How will your answer to (a) change?
Wildhorse's Wind Toys manufactures decorative kites, banners, and windsocks. During the month of January, Wildhorse received orders for 5,000 Valentine's Day banners and 1,300 Easter kites. Because several sewing machines are in the shop for repairs, Wildhorse's has only 1,200 sewing machine hours available for production of these orders. Each Valentine's Day banner sells for $11.00. The banners take one hour to sew and have a total variable cost of $9.00 per banner. The Easter kites sell for $15.00. They take 30 minutes to sew and have a total variable cost of $12.00. (a) With only 1,200 sewing machine hours available, how many units should Wildhorse produce for the below items? Kites Banners Based on your calculations above, which products should Wildhorse prioritize for production in January?
Pharoah's Wind Toys manufactures decorative kites, banners, and windsocks. During the month of January, Pharoah received orders for 5,000 Valentine’s Day banners and 1,200 Easter kites. Because several sewing machines are in the shop for repairs, Pharoah's has only 1,400 sewing machine hours available for production of these orders. Each Valentine’s Day banner sells for $12.00. The banners take one hour to sew and have a total variable cost of $10.00 per banner. The Easter kites sell for $20.00. They take 30 minutes to sew and have a total variable cost of $14.00. With only 1,400 sewing machine hours available, how many units should Pharoah produce for the below items?
The West Indies School Book Shop sells T Shirts emblazoned with the school’s name and logo. Theshirts cost $2,000 each and management estimates that 900 T Shirts will be sold during each month ofthe year. The annual holding cost for a unit of that inventory is estimated to be 1.5% of the purchaseprice. It costs the Book Shop $500 to place a single order.The maximum sale for the Book Shop for any one week is 300 shirts and minimum sales 150shirts. The supplier takes anywhere from 2 to 4 weeks to deliver the merchandise after the order isplaced.i) Determine the highest number of shirts that should be purchased by the Gift Shop in order tominimize stock administration cost.ii) What is the total stock administration costs?iii)Using the EOQ policy, determine the re-order level, minimum inventory level and maximuminventory level for the T Shirts.
Lila battle has determined that the annual demand for number 6 screws is 100,000 screws. Lila, who works in her brother’s hardware store, is in charge of purchasing. She estimates that it costs $10 every time an order is placed. This cost includes her wages, the cost of forms used in the placing order, and so on. Furthermore, she estimates that the cost of carrying one screw in theinventory for an year is one-half of one cent. Assume that the demand is constant throughout the year. (a)How many number 6 screws should Lila order at a time if she wishes to minimize total inventory cost? (b)How many orders per year would be placed? What would the annual ordering cost be? (c)What would the average inventory be? What would the annual holding cost be?
The Book Shop sells emblazoned T Shirts. The shirts cost $2,000 each and management estimates that 900 T Shirts will be sold during each month of the year. The annual holding cost for a unit of that inventory is estimated to be 1.5% of the purchase price. It costs the Book Shop $500 to place a single order. The maximum sale for the Book Shop for any one week is 300 shirts and minimum sales 150 shirts. The supplier takes anywhere from 2 to 4 weeks to deliver the merchandise after the order is placed. i) Determine the highest number of shirts that should be purchased by the Gift Shop in order to minimize stock administration cost. ii) What is the total stock administration costs? iii)Using the EOQ policy, determine the re-order level, minimum inventory level and maximum inventory level for the T Shirts.
The West Indies School Book Shop sells T Shirts emblazoned with the school's name and logo. The shirts cost $2,000 each and management estimates that 900 T Shirts will be sold during each month of the year. The annual holding cost for a unit of that inventory is estimated to be 1.5% of the purchase price. It costs the Book Shop $500 to place a single order. The maximum sale for the Book Shop for any one week is 300 shirts and minimum sales 150 shirts. The supplier takes anywhere from 2 to 4 weeks to deliver the merchandise after the order is placed. i) Determine the highest number of shirts that should be purchased by the Gift Shop in order to minimize stock administration cost. ii) What is the total stock administration costs? iii)Using the EOQ policy, determine the re-order level, minimum inventory level and maximum inventory level for the T Shirts.
The West Indies School Book Shop sells T Shirts emblazoned with the school’s name and logo. The shirts cost $2,000 each and management estimates that 900 T Shirts will be sold during each month of the year. The annual holding cost for a unit of that inventory is estimated to be 1.5% of the purchase price. It costs the Book Shop $500 to place a single order. The maximum sale for the Book Shop for any one week is 300 shirts and minimum sales 150 shirts. The supplier takes anywhere from 2 to 4 weeks to deliver the merchandise after the order is placed. Determine the highest number of shirts that should be purchased by the Gift Shop in order to minimize stock administration cost. What is the total stock administration costs? Using the EOQ policy, determine the re-order level, minimum inventory level and maximum inventory level for the T Shirts.
Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $50. Wesley expects the following unit sales: 2, 000 2, 500 3, 100 2, 900 January February March April May 2, 200 Wesley's ending finished goods inventory policy is 20 percent of the next month's sales. Each handisaw takes approximately 0.30 hours to manufacture, and Wesley pays an average labor wage of $15.00 per hour. Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $5.00 each. The company has an ending raw materials inventory policy of 10 percent of the following month's production requirements. Materials other than the housing unit total $4.00 per handisaw. Manufacturing overhead for this product includes $60,000 annual fixed overhead (based on production of 24,000 units) and $.80 per unit variable manufacturing overhead. Wesley's selling expenses are 5 percent of sales dollars, and…
Jen and Barry's ice cream shop charges $1.55 for a cone. Variable expenses are $0.33 per cone, and fixed costs total $2,300 per month. A Valentine's Day promotion is being planned for the second week of February. During this week, a person buying a cone at the regular price would receive a free cone for a friend. It is estimated that 775 additional cones would be sold and that 975 cones would be given away. Advertising costs for the promotion would be $155. Required: a. Calculate the effect of the promotion on operating income for the second week of February. b. Do you think the promotion should occur? Complete this question by entering your answers in the tabs below. Required A Required B Do you think the promotion should occur? < Required A Required B
Jen and Barry's ice cream shop charges $1.55 for a cone. Variable expenses are $0.25 per cone, and fixed costs total $2,200 per month. A Valentine's Day promotion is being planned for the second week of February. During this week, a person buying a cone at the regular price would receive a free cone for a friend. It is estimated that 725 additional cones would be sold and that 925 cones would be given away. Advertising costs for the promotion would be $140. Required: a. Calculate the effect of the promotion on operating income for the second week of February. b. Do you think the promotion should occur? Complete this question by entering your answers in the tabs below. Required A Required B Calculate the effect of the promotion on operating income for the second week of February. Note: Do not round intermediate calculation and round your final answer to 2 decimal places. in operating income Net
Pam and Lenny’s ice cream shop charges $1.75 for a cone. Variable expenses are $0.42 per cone, and fixed costs total $2,500 per month. A "sweetheart" promotion is being planned for the second week of February. During this week, a person buying a cone at the regular price would receive a free cone for a friend. It is estimated that 625 additional cones would be sold and that 825 cones would be given away. Advertising costs for the promotion would be $170. Required: a. Calculate the effect of the promotion on operating income for the second week of February. (Do not round intermediate calculation and round your final answer to 2 decimal places.) b. Do you think the promotion should occur?multiple choice Yes No