Lobster Trap Company is considering automating its manufacturing facility. Company information before and after the proposed automation follows: Sales revenue Less: Variable cost Contribution margin Less: Fixed cost Net operating income. Before Automation $ 195,000 95,000 $ 100,000 11,000 $ 89,000 Required: 1. Calculate Lobster Trap's break-even sales dollars before and after automation. 2. Compute Lobster Trap's degree of operating leverage before and after automation. Required 1 Required 2 Complete this question by entering your answers in the tabs below. After Automation $ 195,000 39,000 $ 156,000 56,000 $ 100,000 DOL Before Automation DOL After Automation Compute Lobster Trap's degree of operating leverage before and after automation. Note: Round your answers to 4 decimal places. < Required 1 Required 2 >

Lobster Trap Company is considering automating its manufacturing facility. Company information before and after the proposed automation follows: Sales revenue Less: Variable cost Contribution margin Less: Fixed cost Net operating income. Before Automation $ 195,000 95,000 $ 100,000 11,000 $ 89,000 Required: 1. Calculate Lobster Trap's break-even sales dollars before and after automation. 2. Compute Lobster Trap's degree of operating leverage before and after automation. Required 1 Required 2 Complete this question by entering your answers in the tabs below. After Automation $ 195,000 39,000 $ 156,000 56,000 $ 100,000 DOL Before Automation DOL After Automation Compute Lobster Trap's degree of operating leverage before and after automation. Note: Round your answers to 4 decimal places. < Required 1 Required 2 >

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 7CE

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Lobster Trap Company is considering automating its manufacturing facility. Company information before and after the proposed automation follows: Sales revenue Less: Variable cost Contribution margin Less: Fixed cost Net operating income Before Automation $ 194,000 104,000 $90,000 12,000 $ 78,000 Required: 1. Calculate Lobster Trap's break-even sales dollars before and after automation. 2. Compute Lobster Trap's degree of operating leverage before and after automation. Required 1 Required 2 Complete this question by entering your answers in the tabs below. After Automation $ 194,000 51,000 $ 143,000 64,000 $ 79,000 DOL Before Automation DOL After Automation Compute Lobster Trap's degree of operating leverage before and after automation. Note: Round your answers to 4 decimal places.
Lobster Trap Company is considering automating its manufacturing facility. Company information before and after the proposed automation follows: Before Automation AfterAutomation Sales revenue $ 206,000 $ 206,000 Less: Variable cost 99,000 42,000 Contribution margin $ 107,000 $ 164,000 Less: Fixed cost 19,000 57,000 Net operating income $ 88,000 $ 107,000 Required: 1. Calculate Lobster Trap’s break-even sales dollars before and after automation. 2. Compute Lobster Trap’s degree of operating leverage before and after automation.
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Crane Company has decided to introduce a new product. The new product can be manufactured by either a capital-intensive method or a labor-intensive method. The manufacturing method will not affect the quality of the product. The estimated manufacturing costs by the two methods are as follows. Direct materials Direct labor Variable overhead Fixed manufacturing costs (a) Capital-Intensive $6.00 per unit $7.00 per unit $4.00 per unit $3,200,000 Crane' market research department has recommended an introductory unit sales price of $40.00. The selling expenses are estimated to be $622,000 annually plus $2.00 for each unit sold, regardless of manufacturing method. 1. Capital-intensive manufacturing method. 2. Labor-intensive manufacturing method. Break-even point in units Labor-Intensive $7.00 per unit $10.00 per unit $5.50 per unit Calculate the estimated break-even point in annual unit sales of the new product if Crane Company uses the: $2,028,500 Capital-Intensive Labor-Intensive
Instructions: A company has iwo alternative proposuls. The details are as follows: Compare and solve the following data to determine ARR: Proposal I Automated Machine Proposal II Ordinary Machine Cost of Machine 250,000 5 years 180,000 60,000 14,000 25,000 80,000 Estimated Life Estimated sales p.a. Cost: Material Labor years 150,000 40,000 70,000 30,000 Variable Overheads Answer the following: 1. Compute the profitability of the proposals under the return on investment method. 2. Decide whether to accept the offer or not. State your reason. 3. Defend your answer.
What is the answer to question number 33, 34 and 35? Provide a solution.
An automated turning machine is the current constraint at Jordison Corporation. Three products use this constrained resource. Data concerning those products appear below: LN RQ Selling price per unit Variable cost per unit $ 166.99 $ 116.03 JQ $ 364.43 $ 269.93 $ 431.06 $ 278.42 Minutes on the constraint 2.60 5.40 9.60 Rank the products in order of their current profitability from most profitable to least profitable. In other words, rank the products in the order in which they should be emphasized. (Round your intermediate calculations to 2 decimal places.)
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An automated turning machine is the current constraint at Jordison Corporation. Three products use this constrained resource. Data concerning those products appear below: LN JQ RQ Selling price per unit $ 167.36 $ 303.39 $ 411.96 Variable cost per unit $ 136.00 $ 212.11 5 303.18 Minutes on the constraint 1.60 5.60 7.40 Rank the products in order of their current profitability from most profitable to least profitable. In other words, rank the products in the order in which they should be emphasized. (Round your intermediate calculations to 2 decimal places)
An automated turning machine is the current constraint at Jordison Corporation. Three products use this constrained resource. Data concerning those products appear below: LN JQ $168.82 $313.84 $403.08 $139.72 $245.80 $287.56 RQ Selling price per unit Variable cost per unit Minutes on the constraint 1.50 4.20 7.60 Rank the products in order of their current profitability from most profitable to least profitable, In other words, rank the products in the order in which they should be emphasized. (Round your Intermedlate calculations to 2 declmoal places.) Multiple Cholce LN. JQ. RQ RQ. LN. JQ RQ. JQ. LN JQ. RQ LN Mc Graw Hill Type here to search 70°F Mostly cloudy 10 DELL
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The management of Hartman Company is trying to determine the amount of each of two products to produce over the coming planning period. The following information concerns labor availability, labor utilization, and product profitability: a. Develop a linear programming model of the Hartman Company problem. Solve the model to determine the optimal production quantities of products 1 and 2. b. In computing the profit contribution per unit, management does not deduct labor costs because they are considered fixed for the upcoming planning period. However, suppose that overtime can be scheduled in some of the departments. Which departments would you recommend scheduling for overtime? How much would you be willing to pay per hour of overtime in each department? c. Suppose that 10, 6, and 8 hours of overtime may be scheduled in departments A, B, and C, respectively. The cost per hour of overtime is 18 in department A, 22.50 in department B, and 12 in department C. Formulate a linear programming model that can be used to determine the optimal production quantities if overtime is made available. What are the optimal production quantities, and what is the revised total contribution to profit? How much overtime do you recommend using in each department? What is the increase in the total contribution to profit if overtime is used?