Free Wheels has a plant that assembles bicycles. The plant currently has a small cafeteria forthe workers but the kitchen equipment is in need of a substantial overhaul. Free Wheels hasbeen offered a contract by Beasteats to supply food to the workers. The particulars of thesituation are shown in the table. Should Free Wheels continue with the in-house food servicesor contract the services to Beasteats? (Hint: Create a table with the columns for year (for 0-8years), In-house current cost, contract current cost, in-house PW, and contract PW).Food Service: In-House Versus ContractFood service labour (hours/year)Wage rate (real, time 1, $/hour)Overhead cost (real, time 1, S/year)Kitchen equipment first cost (current, time 0, S)Contract cost, years 1 to 3 (current S)Contract cost, years 4 to 6 (current S)Current dollar MARRExpected annual inflation rateStudy period (years)60001518 00025 00055 00063 70022%5%6

Name: Free Wheels has a plant that assembles bicycles. The plant currently
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Description: Free Wheels has a plant that assembles bicycles. The plant currently has a small cafeteria forthe workers but the kitchen equipment is in need of a substantial overhaul. Free Wheels hasbeen offered a contract by Beasteats to supply food to the worke

The cooking equipment is in desperate need of repair. Besteats has given Free Wheels a contract to…

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Free Wheels has a plant that assembles bicycles. The plant currently has a small cafeteria for the workers but the kitchen equipment is in need of a substantial overhaul. Free Wheels has been offered a contract by Beasteats to supply food to the workers. The particulars of the situation are shown in the table. Should Free Wheels continue with the in-house food services or contract the services to Beasteats? (Hint: Create a table with the columns for year (for 0-8

Free Wheels has a plant that assembles bicycles. The plant currently has a small cafeteria for the workers but the kitchen equipment is in need of a substantial overhaul. Free Wheels has been offered a contract by Beasteats to supply food to the workers. The particulars of the situation are shown in the table. Should Free Wheels continue with the in-house food services or contract the services to Beasteats? (Hint: Create a table with the columns for year (for 0-8

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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Zukiria Chicken Co. (JCC) is a chicken farm in Abbotsford, B.C. JCC reports under IFRS and has a December 31 fiscal year end. JCC also grows corn in the acres surrounding its chicken barns and sells the corn each August once the crop is harvested.JCC has four chicken barns, each with 12,000 laying hens. Each hen lays five eggs per week, which are sold to grocery stores. Eggs sell for $0.05 each, and JCC incurs $1,150 per week in egg packing and cleaning costs. Hens are kept for two years before needing to be replaced and are purchased in January 1 every second year for $0.75 each. After the two years, the laying hens are sold at a price of $0.45 each. If JCC disposed of the laying hens after one year, they would be sold at a price of $0.55 each.The hens currently owned by JCC have been around for one year. JCC’s corn seed is planted each April 1 at a cost of $0.20 per cornstalk. JCC planted 45 cornstalks per acre on each of its 36 acres. It costs JCC $1,000 in labour to plant the…
Novak Windows manufactures and sells custom storm windows for enclosed porches. Novak also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be provided by other vendors. Novak enters into the following contract on June 1, 2021, with a local homeowner. The customer purchases windows for a price of $4,770 and chooses Novak to do the installation. Novak charges the same price for the windows irrespective of whether it does the installation or not. The price of the installation service is estimated to have a fair value of $1,830. The customer pays Novak $4,270 (which equals the fair value of the windows, which have a cost of $2,300) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on August 1, 2021, Novak completes installation on September 15, 2021, and the customer pays the balance due. (Round amounts to nearest dollar.)Prepare the journal entries for…
Pearl Windows manufactures and sells custom storm windows for three-season porches. Pearl also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be performed by other vendors. Pearl enters into the following contract on July 1, 2017, with a local homeowner. The customer purchases windows for a price of $2,420 and chooses Pearl to do the installation. Pearl charges the same price for the windows irrespective of whether it does the installation or not. The installation service is estimated to have a standalone selling price of $600. The customer pays Pearl $1,960 (which equals the standalone selling price of the windows, which have a cost of $1,120) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2017, Pearl completes installation on October 15, 2017, and the customer pays the balance due. Prepare the journal entries for Pearl in 2017.
Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $22.30 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below: Activity Cost Pool Activity Measure Activity for the Year Cleaning carpets Square feet cleaned (00s) 9,500 hundred square feet Travel to jobs Miles driven 292,000 miles Job support Number of jobs 2,000 jobs Other (organization-sustaining costs and idle…
Nash Windows manufactures and sells custom storm windows for three-season porches. Nash also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be performed by other vendors. Nash enters into the following contract on July 1, 2020, with a local homeowner. The customer purchases windows for a price of $2,360 and chooses Nash to do the installation. Nash charges the same price for the windows irrespective of whether it does the installation or not. The customer pays Nash $1,920 (which equals the standalone selling price of the windows, which have a cost of $1,100) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2020, Nash completes installation on October 15, 2020, and the customer pays the balance due. (a) Nash estimates the standalone selling price of the installation based on an estimated cost of $440 plus a margin of…
A motor carrier is trying to determine its cost to pick up a shipment originating in Hot Springs, AR. The carrier dispatches a truck and trailer from Little Rock to pick up the load in Hot Springs. Little Rock is 50 miles from Hot Springs and the trip takes 1 hour. The driver arrives at the shipper and waits for 2 hours while the trailer is loaded. For this exercise the carrier is only concerned with the cost of driving from the terminal to Hot Springs and picking up the load (i.e., does not care about line-haul and delivery costs). Assume there are 30 days in a month. Use the information provided in the following table to determine how much it cost the carrier to pick up this load from Hot Springs: Equipment Purchase Price Tractor $80,000 (Monthly payment = $1,584) $35,000 (Monthly payment = $406) %3! Trailer %3D Depreciation Tractor 5-year straight line 10-ycar straight line Trailer Interest Tractor 7% APR for 5 years 7% APR for 10 years $5.00/gallon for diesel and the tractor gets…
Hannah Ortega is considering expanding her business. She plans to hire a salesperson to cover trade shows. Because of compensation, travel expenses, and booth rental, fixed costs for a trade show are expected to be $10,660. The booth will be open 26 hours during the trade show. Ms. Ortega also plans to add a new product line, ProOffice, which will cost $190 per package. She will continue to sell the existing product, EZRecords, which costs $103 per package. Ms. Ortega believes that the salesperson will spend approximately 16 hours selling EZRecords and 10 hours marketing ProOffice. Required a. Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 73 units of EZRecords and 59 units of ProOffice.
Pearl Windows manufactures and sells custom storm windows for three-season porches. Pearl also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be performed by other vendors. Pearl enters into the following contract on July 1, 2020, with a local homeowner. The customer purchases windows for a price of $2,360 and chooses Pearl to do the installation. Pearl charges the same price for the windows irrespective of whether it does the installation or not. The installation service is estimated to have a standalone selling price of $570. The customer pays Pearl $2,100 (which equals the standalone selling price of the windows, which have a cost of $1,110) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2020, Pearl completes installation on October 15, 2020, and the customer pays the balance due.Prepare the journal entries for Pearl in 2020
Prepare the journal entries for Sunland in 2017. Sunland Windows manufactures and sells custom storm windows for three-season porches. Sunland also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be performed by other vendors. Sunland enters into the following contract on July 1, 2017, with a local homeowner. The customer purchases windows for a price of $2,490 and chooses Sunland to do the installation. Sunland charges the same price for the windows irrespective of whether it does the installation or not. The installation service is estimated to have a standalone selling price of $590. The customer pays Sunland $1,950 (which equals the standalone selling price of the windows, which have a cost of $1,110) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2017, Sunland completes installation on October 15, 2017, and the customer pays the…
Kim Epson operates a full-service car wash, which operatesfrom 8 a.m. to 8 p.m., 7 days a week. The car wash has two sta-tions: an automatic washing and drying station and a manualinterior cleaning station. The automatic washing and dryingstation can handle 30 cars per hour. The interior cleaningstation can handle 200 cars per day. Based on a recent year-end review of operations, Kim estimates that future demandfor the interior cleaning station for the 7 days of the week, expressed in average number of cars per day, would be asfollows:Day Mon. Tues. Wed. Thurs. Fri. Sat. Sun.Cars 160 180 150 140 280 300 250By installing additional equipment (at a cost of $50,000), Kimcan increase the capacity of the interior cleaning station to300 cars per day. Each car wash generates a pretax contribu-tion of $4.00. Should Kim install the additional equipment ifshe expects a pretax payback period of three years or less?
Tim Urban, owner/manager of Urban's Motor Court in Key West, is considering outsourcing the daily room cleanup for his motel to Duffy's Maid Service. Tim rents an average of 50 rooms for each of 365 nights (365 × 50 equals the total rooms rented for the year). Tim's cost to clean a room is $13.00. The Duffy's Maid Service quote is $19.00 per room plus a fixed cost of $26,000 for sundry items such as uniforms with the motel's name. Tim's annual fixed cost for space, equipment, and supplies is $61,000. Based on the given information related to costs for each of the options, the crossover point for Tim = room nights (round your response to the nearest whole number).
Hannah Ortega is considering expanding her business. She plans to hire a salesperson to cover trade shows. Because of compensation, travel expenses, and booth rental, fixed costs for a trade show are expected to be $14,850. The booth will be open 33 hours during the trade show. Ms. Ortega also plans to add a new product line, ProOffice, which will cost $180 per package. She will continue to sell the existing product, EZRecords, which costs $92 per package. Ms. Ortega believes that the salesperson will spend approximately 23 hours selling EZRecords and 10 hours marketing ProOffice. Required a. Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 70 units of EZRecords and 46 units of ProOffice. b. Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 192 units of EZRecords and 104 units of ProOffice. Note: For all requirements, round "Cost per unit" to 2 decimal…

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