Oceanic Boat works manufactures boat hulls at a cost of $5,500 per unit. The hulls are sold to marinas for $6,300 each. The company is considering adding motors, seats, and controls at an additional cost of $3,400 per unit. The completed boats could then be sold for $9,800 each. Calculate the net benefit (cost) of processing the boat hulls into fully equipped boats. (Use a negative sign with your answer, if appropriate.)

Oceanic Boat works manufactures boat hulls at a cost of $5,500 per unit. The hulls are sold to marinas for $6,300 each. The company is considering adding motors, seats, and controls at an additional cost of $3,400 per unit. The completed boats could then be sold for $9,800 each. Calculate the net benefit (cost) of processing the boat hulls into fully equipped boats. (Use a negative sign with your answer, if appropriate.)

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter15: Decision Analysis

Section: Chapter Questions

Problem 5P: Hudson Corporation is considering three options for managing its data warehouse: continuing with its...

See similar textbooks

Similar questions

Mickey's Boats will produce a new line of speed boats. It has a choice of larger production facility with a less laborers or smaller production facility with more laborers. Each boat will be sold for $80,000. If the large production facility is chosen, the cost to produce each boat will be $50,000, while the cost per boat will be $64, 000 at the smaller production facility. The large production facility would have fixed costs of $10 million and a depreciation expense of $1,600,000, while those expenses would be $4 million and $600,000 for the smaller production facility. Calculate the number of speed boats for which the accounting operating profit is the same regardless of the production facility choice? a. 500 boats b. 1,000 boats c. 429 boats d. 215 boats
Please help me. Fast solution please. Thankyou.
Hudson Corporation is considering three options for managing its data warehouse: continuing with its own staff, hiring an outside vendor to do the managing, or using a combination of its own staff and an outside vendor. The cost of the operation depends on future demand. The annual cost of each option (in thousands of dollars) depends on demand as follows: If the demand probabilities are 0.2, 0.5, and 0.3, which decision alternative will minimize the expected cost of the data warehouse? What is the expected annual cost associated with that recommendation? Construct a risk profile for the optimal decision in part (a). What is the probability of the cost exceeding $700,000?
The Hershey Kayak Making Co. is considering whether or not to make a key part for one of its kayak models. Its projected total requirement for the part is 15,000 units, and a trusted supplier can make the part for $25 per unit. Donald Biden, the owner, estimates that the purchase contract will cost $250 to prepare, and if Pearson made the part in-house, an additional investment in equipment would cost $30,000; the variable cost for the part would be $14 per unit. Help Donald to determine the cost of buying.
Sheridan manufactures unpainted furniture for the do-it-yourself market. It currently sells a table for $65. Production costs are $35 variable and $10 fixed. Sheridan is considering staining and sealing the table to sell it for $100. Variable costs to finish each table are expected to be $13, and fixed costs are expected to be $1. Prepare an analysis showing whether Sheridan should sell unpainted or finished tables. (If an amount reduces the net income then enter with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).) Incremental revenue $ Incremental cost $ Increase (decrease) in contribution margin Sheridan eTextbook and Media process the tables further. Net Income Increase (Decrease) SUPPORT
Whitmore Glassware makes a variety of drinking glasses and mugs. The company’s designers have discovered a market for a 16 ounce mug with college logos. Market research indicates that a mug like this would sell well in the market priced at $26.65. Whitmore only introduces a product if they can an operating profit of 30 percent of costs. Required: What is the highest acceptable manufacturing cost for which Whitmore would be willing to produce the mugs? (Round your answer to 2 decimal places.)
Whitmore Glassware makes a variety of drinking glasses and mugs. The company's designers have discovered a market for a 16 ounce mug with college logos. Market research indicates that a mug like this would sell well in the market priced at $26.65. Whitmore only introduces a product if they can an operating profit of 30 percent of costs. Required: What is the highest acceptable manufacturing cost for which Whitmore would be willing to produce the mugs? (Round your answer to 2 decimal places.) Highest acceptable manufacturing costs
Whitmore Glassware makes a variety of drinking glasses and mugs. The company’s designers have discovered a market for a 16 ounce mug with college logos. Market research indicates that a mug like this would sell well in the market priced at $26. Whitmore only introduces a product if they can an operating profit of 30 percent of costs. Required: What is the highest acceptable manufacturing cost for which Whitmore would be willing to produce the mugs?
Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cast of manuscript preparation, textbook design, and web-site construction is estimated to be $155,000. Variable processing costs are estimated to be $6 per book. The publisher plans to sell single-user access to the book for $47. (a) Build a spreadsheet model in Excel to calculate the profit/loss for a given demand. What profit can be anticipated with a demand of 3,200 copies? For subtractive or negative numbers use a minus sign. -23800 (b) Use a data table to vary demand from 1,000 to 6,000 in increments of 200 to test the sensitivity of profit to demand. Breakeven occurs where profit goes from a negative to a positive value, that is, breakeven is where total revenue - total cost yielding a profit of zero. In which interval of demand does breakeven occur? (1) Breakeven appears in the interval of 3,200 to 3,400 copies. (1) Breakeven appears in the interval…
Assume that Juicy reports the following costs to make 17.5 oz. bottles for its Juice Cocktails: (Click the icon to view the costs.) Another manufacturer offers to sell Juicy the bottles for $0.25. The capacity now used to make bottles will become idle if the company purchases the bottles. Further, one supervisor with a salary of $60,000, a fixed cost, would purchased. Requirement 1. Prepare a schedule that compares the costs to make and buy the 17.5 oz. bottles. Should Juicy make or buy the bottles? (Round the cost per bottle to three decimal places.) Direct materials Direct labor Variable factory overhead Avoidable annual fixed factory overhead Purchase cost Total relevant costs Make Total Per Bottle Total $ 104,500 $ 0.095 $ 45,100 $ 0.041 71,500 0.065 60,000 Buy Data table Per Bottle Juicy Company Cost of Making 17.5-Ounce Bottles 275,000 0.250 Total Cost for 1,100,000 Bottles Cost per Bottle $ 281,100 $ 275,000 $ 0.250 Direct materials 104,500 $ 0.095 Direct labor 45,100 0.041…
Bhola
Neptune Company produces toys and other items for use in beach and resort areas. A small, inflatable toy has come onto the market that the company is anxious to produce and sell. The new toy will sell for $2.70 per unit. Enough capacity exists in the company's plant to produce 30,400 units of the toy each month. Variable expenses to manufacture and sell one unit would be $1.72, and fixed expenses associated with the toy would total $44,188 per month. The company's Marketing Department predicts that demand for the new toy will exceed the 30,400 units that the company is able to produce. Additional manufacturing space can be rented from another company at a fixed expense of $2,209 per month. Variable expenses in the rented facility would total $1.89 per unit, due to somewhat less efficient operations than in the main plant. Required: 1. What is the monthly break-even point for the new toy in unit sales and dollar sales. 2. How many units must be sold each month to attain a target profit…