Carol Cagle has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an average inventory turnover of only 12 times per year. He has therefore determined that he will reduce hiscomponent lot sizes. He has developed the following data for one component, the safety chain clip:Setup labor costAnnual holding costDaily productionAnnual demandDesired lot size$30 per hour$13 per unit960 units/8 hour day24,840 (270 days each x daily demand of 92 units)120 units (one hour of production)To obtain the desired lot size, the set-up time that should be achieved = ☐ minutes (round your response to two decimal places).

The desired lot size, the setup time that should be achieved is 6.59 minutes.Explanation:Step 1:…

Answered: Carol Cagle has a repetitive…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Futura Company purchases the 66,000 starters that it installs in its standard line of farm tractors from a supplier for the price of $10.50 per unit. Due to a reduction in output, the company now has idle capacity that could be used to produce the starters rather than buying them from an outside supplier. However, the company's chief engineer is opposed to making the starters because the production cost per unit is $11.40 as shown below: Direct materials Direct labor Supervision Depreciation Variable manufacturing overhead Rent Total product cost Per Unit $ 4.00 3.50 1.90 1.10 0.50 0.40 $11.40 Total $ 125,400 $ 72,600 $ 26,400 If Futura decides to make the starters, a supervisor would have to be hired (at a salary of $125,400) to oversee production. However, the company has sufficient idle tools and machinery such that no new equipment would have to be purchased. The rent charge above is based on space utilized in the plant. The total rent on the plant is $88,000 per period.…
Artisan Metalworks has a bottleneck in their production that occurs within the engraving department. Jamal Moore, the COO, is considering hiring an extra worker, whose salary will be $54,000 per year, to solve the problem. With this extra worker, the company could produce and sell 3,000 more units per year. Currently, the selling price per unit is $25.00 and the cost per unit is $7.80. Direct materials $3.50 Direct labor 1.10 Variable overhead 0.40 Fixed overhead (primarily depreciation of equipment) 2.80 Total $7.80 Using the information provided, calculate the annual financial impact of hiring the extra worker. Profit $_____ ______
Futura Company purchases the 71,000 starters that it installs in its standard line of farm tractors from a supplier for the price of $12.70 per unit. Due to a reduction in output, the company now has idle capacity that could be used to produce the starters rather than buying them from an outside supplier. However, the company's chief engineer is opposed to making the starters because the production cost per unit is $12.90 as shown below: Direct materials Direct labor Supervision Depreciation Variable manufacturing overhead Rent Total product cost Per Unit $ 6.00 3.00 1.50 1.30 0.70 0.40 $ 12.90 Total $ 106,500 $ 92,300 $ 28,400 If Futura decides to make the starters, a supervisor would have to be hired (at a salary of $106,500) to oversee production. However, the company has sufficient idle tools and machinery such that no new equipment would have to be purchased. The rent charge above is based on space utilized in the plant. The total rent on the plant is $84,000 per period.…
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.
Yardwork Tools Corp manufactures garden tools in a factory in Taneytown, Maryland. Recently, the company designed a collection of tools for professional use rather than consumer use. Management needs to make a good decision about whether to produce this line in their existing space in Maryland, where space is available or to accept an offer from a manufacturer in Taiwan. Data concerning the decision are as follows: Expected annual sales of tools (in units) 660,000 Average selling price of tools $11 Price quoted by Taiwanese company, in New Taiwanese Dollars (NTD) 27,300 Current exchange rate 9,100 NTD = $1 Variable manufacturing costs $2.85 per unit Incremental annual fixed manufacturing costs associated with the new product line $310,000 Variable selling and distribution costsª $0.50 per unit Annual fixed selling and distribution costsª $250,000 ªSelling and distribution costs are the same regardless of whether the tools…
Steven oversees the production department for a factory that makes plastic outdoor chairs. department sells all of its production to external parties, and the department has an overall production capacity of 150,000 chairs. Their sales data is as follows: Sales (90,000 chairs) a $460,000, Variable Costs are $206,200, and Fixed Costs are $194,350. The internal Resale would like to purchase 26,700 chairs from the Production Department. They will be selling external retailers for $15.49 per chair. If the Resale Division negotiates a deal with the Pro Department to purchase each chair for its absorption cost plus a 2.4% markup, then what amount of Operating Income the Resale Division would report for their sale of 26,700 cha per unit cost to nearest cents. O $291,831 O $351,105 O $198,235 O $3,612
Futura Company purchases the 60,000 starters that it installs in its standard line of farm tractors from a supplier for the price of $10.40 per unit. Due to a reduction in output, the company now has idle capacity that could be used to produce the starters rather than buying them from an outside supplier. However, the company’s chief engineer is opposed to making the starters because the production cost per unit is $11.20 as shown below: Per Unit Total Direct materials $ 5.00 Direct labor 2.50 Supervision 1.70 $ 102,000 Depreciation 1.10 $ 66,000 Variable manufacturing overhead 0.40 Rent 0.50 $ 30,000 Total product cost $ 11.20 If Futura decides to make the starters, a supervisor would have to be hired (at a salary of $102,000) to oversee production. However, the company has sufficient idle tools and machinery such that no new equipment would have to be purchased. The rent charge above is based on space utilized in the plant. The total rent on the…
Greener Garden Group produces and sells 21,200 litres of organic lawn and garden fertilizer. The fertilizer, GoGrow, is a favourite among landscaping companies in southern Manitoba. The selling price of GoGrow is $16 per litre, variable costs are $9 per litre, fixed manufacturing overhead costs in the plant total $121,900 per month, and the fixed selling costs total $164,300 per month. Recent supply chain problems have made it difficult for the Greener Garden Group to get the quantity of chemicals needed to produce the fertilizer. Because of this, sales have dropped to 6,360 litres per month and will most likely stay at this level until the supply of chemicals is back to normal. Management expects that the supply chain issues will ease up soon with business returning to normal in two months. However, the CEO of Greener Garden Group thinks the company should fully shut down operations for two months until the supply chain issues are resolved. If the Greener Garden Group does close the…
Futura Company purchases the 71,000 starters that it installs in its standard line of farm tractors from a supplier for the price of $13.00 per unit. Due to a reduction in output, the company now has idle capacity that could be used to produce the starters rather than buying them from an outside supplier. However, the company's chief engineer is opposed to making the starters because the production cost per unit is $14.20 as shown below: Direct materials Direct labor Supervision Depreciation Variable manufacturing overhead Rent Total product cost Per Unit Total $ 7.00 3.00 B 1.90 $ 134,900 1.40 $ 99,400 0.50 0.40 $ 28,400 $14.20 If Futura decides to make the starters, a supervisor would have to be hired (at a salary of $134,900) to oversee production. However, the company has sufficient idle tools and machinery such that no new equipment would have to be purchased. The rent charge above is based on space utilized in the plant. The total rent on the plant is $82,000 per period.…
As production manager, Paul noticed that several recent production runs generated a decent-sized collection of scrap pieces in the designated scrap bin. He looks at current prices for this scrap and recognizes the market price is relatively high for this material right now, so he makes plans to sell it. He estimates that there are 51 pounds of scrap available to be sold. The current sales price is $10 per pound for this particular scrap material. (a) Assume Paul uses the sales method to account for scrap. Record the journal entry for the sale of all the scrap for cash. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required. select "No Entry" for the account titles and enter 0 for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit Credit
Goshford Company produces a single product and has capacity to produce 100,000 units per month. Costs to produce its current sales of 80,000 units follow. The regular selling price of the product is $100 per unit. Management is approached by a new customer who wants to purchase 20,000 units of the product for $75 per unit. If the order is accepted, there will be no additional fixed manufacturing overhead and no additional fixed selling and administrative expenses. The customer is not in the company’sregular selling territory, so there will be a $5 per unit shipping expense in addition to the regular variable selling and administrative expenses. Determine whether management should accept or reject the new business.
Scholes Systems supplies a particular type of office chair to large retailers such as Target, Costco, and Office Max. Scholes is concerned about the possible effects of inflation on its operations. Presently, the company sells 81,000 units for $65 per unit. The variable production costs are $35, and fixed costs amount to $1,410,000. Production engineers have advised management that they expect unit labor costs to rise by 15 percent and unit materials costs to rise by 10 percent in the coming year. Of the $35 variable costs, 40 percent are from labor and 20 percent are from materials. Variable overhead costs are expected to increase by 20 percent. Sales prices cannot increase more than 10 percent. It is also expected that fixed costs will rise by 5 percent as a result of increased taxes and other miscellaneous fixed charges. The company wishes to maintain the same level of profit in real dollar terms. It is expected that to accomplish this objective, profits must increase by 7 percent…

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