The Quality Athletics Company produces a wide variety of outdoor sports equipment. Its newest division, Golf Technology, manufactures and sells a single product: AccuDriver, a golf club that uses global positioning satellite technology to improve the accuracy of golfers' shots. The demand for AccuDriver is relatively insensitive to price changes. The following data are available for Golf TechnoloTotal annual fixed costs $30,000,000 Variable cost per AccuDriver $440 Number of AccuDrivers sold each year 155,000 Average operating assets invested in the division $ 50,000,0001. Compute Golf Technology's ROI if the selling price of AccuDrivers is $ 740 per club. 2. If management requires an ROI of at least 20% from the division, what is the minimum selling price that the Golf Technology Division should charge per AccuDriver club? 3. Assume that Quality Athletics judges the performance of its investment centres on the basis of RI rather than ROI. What is the minimum selling price that Golf Technology should charge per AccuDriver if the company's required rate of return is 10% ?

The Quality Athletics Company produces a wide variety of outdoor sports equipment. Its newest division, Golf Technology, manufactures and sells a single product: AccuDriver, a golf club that uses global positioning satellite technology to improve the accuracy of golfers' shots. The demand for AccuDriver is relatively insensitive to price changes. The following data are available for Golf TechnoloTotal annual fixed costs $30,000,000 Variable cost per AccuDriver $440 Number of AccuDrivers sold each year 155,000 Average operating assets invested in the division $ 50,000,0001. Compute Golf Technology's ROI if the selling price of AccuDrivers is $ 740 per club. 2. If management requires an ROI of at least 20% from the division, what is the minimum selling price that the Golf Technology Division should charge per AccuDriver club? 3. Assume that Quality Athletics judges the performance of its investment centres on the basis of RI rather than ROI. What is the minimum selling price that Golf Technology should charge per AccuDriver if the company's required rate of return is 10% ?

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

Chapter11: Linear Optimization Models

Section: Chapter Questions

Problem 1P: Kelson Sporting Equipment, Inc., makes two types of baseball gloves: a regular model and a catchers...

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The Sports Equipment Company produces a wide variety of sports equipment. Its newest division, Golf Technology, manufactures and sells a single product— AccuDriver, a golf club that uses global positioning satellite technology to improve the accuracy of golfers’ shots. The demand for AccuDriver is relatively insensitive to price changes. The following data are available for Golf Technology, which is an investment center for Sports Equipment: Total annual fixed costs $26,000,000 Variable cost per AccuDriver $ 600 Number of AccuDrivers sold each year 170,000 Average operating assets invested in the division $46,000,000 Q. Compute Golf Technology’s ROI if the selling price of AccuDrivers is $800 per club.
The Sports Equipment Company produces a wide variety of sports equipment. Its newest division, Golf Technology, manufactures and sells a single product— AccuDriver, a golf club that uses global positioning satellite technology to improve the accuracy of golfers’ shots. The demand for AccuDriver is relatively insensitive to price changes. The following data are available for Golf Technology, which is an investment center for Sports Equipment: Total annual fixed costs $26,000,000 Variable cost per AccuDriver $ 600 Number of AccuDrivers sold each year 170,000 Average operating assets invested in the division $46,000,000 Q.Assume that Sports Equipment judges the performance of its investment centers on the basis of RI rather than ROI. What is the minimum selling price that Golf Technology should charge per AccuDriver if the company’s required rate of return is 20%?
The Outdoor Sports Company produces a wide variety of sports equipment. Its newest division, Golf Technology, manufactures and sells a single product-AccuDriver, a golf club that uses global positioning satellite technology to improve the accuracy of golfers' shots. The demand for AccuDriver is relatively insensitive to price changes. The following data are available for Golf Technology, which is an investment center for Outdoor Sports: (Click the icon to view the data.) Read the requirements. Requirement 1. Compute Golf Technology's ROI if the selling price of AccuDrivers is $910 per club. Determine the formula used to calculate ROI, then calculate the ROI for Golf Technology. (Enter the ROI as a percentage, rounded to the nearest hundredth percent, X.XX%.) ROI =
The Conti Company is decentralized, and divisions are considered investment contors. Con has one division that manufactures oak dining room chairs with upholstered seat cushions. The Chair Division cuts, assembles, and finishes the cak chairs and then purchases and attaches the seat cushions (Click the icon to view additional information) Read the requirements Requirement 3. Assume the Chair Division purchases the 900 cushions needed from the Cushion Division at its current variable cost. What is the total contribution margin for each division and the company? (Enter "0" for any zero amounts) Number of units Contribution margin per unt Total contribution margin Cushion Division Total Requirement 4. Review your answers for Requirements 1, 2, and 3. What is the best option for Con Company? The best option for Cois in total contribution margin than if the duson purchanchons inveraly By having the Chair Division purchase the cushions from a in outside vendor, the company would get…
Kelson Sporting Equipment, Inc., makes two types of baseball gloves: a regular model and a catchers model. The firm has 900 hours of production time available in its cutting and sewing department, 300 hours available in its finishing department, and 100 hours available in its packaging and shipping department. The production time requirements and the profit contribution per glove are given in the following table: Assuming that the company is interested in maximizing the total profit contribution, answer the following: a. What is the linear programming model for this problem? b. Develop a spreadsheet model and find the optimal solution using Excel Solver. How many of each model should Kelson manufacture? c. What is the total profit contribution Kelson can earn with the optimal production quantities? d. How many hours of production time will be scheduled in each department? e. What is the slack time in each department?
Gibson Motors manufactures specialty tractors. It has two divisions: a Tractor Division and a Tire Division. The Tractor Division can use the tires produced by the Tire Division. The market price per tire is $75. The Tire Division has the following costs per tire: i (Click the icon to view the costs and additional information.) Read the requirements. Requirement 1. Assume that the Tire Division has excess capacity, meaning that it can produce tires for the Tractor Division without giving up any of its current tire sales to outsiders. If Gibson Motors has a negotiated transfer price policy, what is the lowest acceptable transfer price? What is the highest acceptable transfer price? (Assume the $1 includes only the variable portion of conversion costs.) The lowest acceptable transfer price is the Tire Division's Requirements 1. Assume that the Tire Division has excess capacity, meaning that it can produce tires for the Tractor Division without giving up any of its current tire sales to…
Quest Motors, Inc., operates as a decentralized multidivision company. The Vivo division of Quest Motors purchases most of its airbags from the airbag division. The airbag division’s incremental cost for manufacturing the airbags is $90 per unit. The airbag division is currently working at 80% of capacity. The current market price of the airbags is $125 per unit. Q. Using the general guideline presented in the chapter, what is the minimum price at which the airbag division would sell airbags to the Vivo division?
Garcia Sports, Inc., produces high-quality sports equipment. The company’s Golf Division manufactures three lines of golf clubs—the Standard, the Deluxe, and the Pro—that are widely used in amateur play. Selected information on the golf clubs is given below: Standard Deluxe Pro Selling price per set $200.00 $400.00 $600.00 Variable expenses per set: Production $100.00 $250.00 $350.00 Selling (5% of selling price) $ 10.00 $ 20.00 $ 30.00 All sales are made through the company’s own retail outlets. The Golf Division has the following monthly fixed costs: Fixed production costs $200,000 Advertising expense 125,000…
Colby Company makes cases for cell phones of all sizes and types for sale through specialty retailers. The company makes a standard model for the most recent iPhone as well as a deluxe model. Management has designed an ABC system with the following activity cost pools and activity rates for these models: Activity Cost Pool Activity Rates Supporting manufacturing $ 2 per direct labour-hour Order processing $ 12 per order Customer service $ 53 per customer Management would like an analysis of the profitability of a particular customer, Cell City, which has ordered the following products over the last 12 months: Standard Model Deluxe Model Number of cases 120 20 Number of orders 5 2 Direct labour-hours per case 0.25 0.40 Selling price per case $ 32 $ 52 Direct materials cost per case $ 9 $ 12 The company’s direct labour rate is $12 per hour. Required: Using the company’s ABC system, compute the customer margin…
Identify fixed and variable costs Intuit Inc. (INTU) develops and sells software products for the personal finance market, including popular titles such as Quickbooks and TurboTax. Classify each of the following costs and expenses for this company as either variable or fixed to the number of units produced and sold: Packaging costs Sales commissions Property taxes on general offices Shipping expenses Straight-line depreciation of computer equipment President's salary Salaries of software developers Salaries of human resources personnel Wages of telephone order assistants Costs of providing online support Users guides
Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals 146,000. Each door handle sells for 12 and has variable cost of 9; each trim kit sells for 8 and has variable cost of 5. Required: 1. What are the contribution margin per unit and the contribution margin ratio for door handles and for trim kits? 2. If Polaris sells 20,000 door handles and 40,000 trim kits, what is the operating income? 3. How many door handles and how many trim kits must be sold for Polaris to break even? 4. CONCEPTUAL CONNECTION Assume that Polaris has the opportunity to rearrange its plant to produce only trim kits. If this is done, fixed costs will decrease by 35,000, and 70,000 trim kits can be produced and sold. Is this a good idea? Explain.
An investment banker is analyzing two companies that specialize in the production and sale of candied yams. Traditional Yams uses a labor-intensive approach, and Auto-Yams uses a mechanized system. CVP income statements for the two companies are shown below. Sales Variable costs Contribution margin Fixed costs Net income Traditional Yams $397,000 329,000 68,000 18,000 $50,000 Auto-Yams $397,000 162,000 235,000 185,000 $50,000 The investment banker is interested in acquiring one of these companies. However, she is concerned about the impact that each company's cost structure might have on its profitability.