Chapter 5.S, Problem 13P

a)

Summary Introduction

To determine: The revenue retrieval for GF.

Introduction: The revenue is the income obtained from the sale of products and services; it can also refer to any assets or capital related with the main operations of the firm before any expenses or costs are deducted.

Answer to Problem 13P

The revenue retrieval amount for GF Deluxe is $3.93 and PM is $2.63.

Explanation of Solution

Given information:

GF Deluxe:

Part	Resale revenue per unit	Recycling revenue per unit	Processing cost per unit	Disposal cost per unit
Metal frame	$3.27	$4.78	$1.05	$0.85
Battery	$0.00	$3.68	$6.18	$3.05
Motor housing	$3.93	$2.95	$2.05	$1.25
Trimmer head	$1.25	$0.75	$1.00	$0.65
String feeder system	$1.05	$1.25	$1.50	$1.40

PM:

Part	Resale revenue per unit	Recycling revenue per unit	Processing cost per unit	Disposal cost per unit
Metal frame	$3.18	$3.95	$1.15	$0.65
Battery	$0.00	$2.58	$4.98	$2.90
Motor housing	$4.05	$3.45	$2.45	$1.90
Trimmer head	$1.05	$0.85	$1.10	$0.75
String feeder system	$1.05	$1.25	$1.50	$1.40

Formula:

$\text{Revenue retrieval}=\left[\begin{array}{l}\text{Total resale revenue}+\text{Total recycling revenue}-\\ \text{Total processing cost}-\text{Total disposal cost}\end{array}\right]$

Calculate the revenue retrieval amount for GF Deluxe:

Part	Resale revenue per unit	Recycling revenue per unit	Processing cost per unit	Disposal cost per unit
Metal frame	$3.27	$4.78	$1.05	$0.85
Battery	$0.00	$3.68	$6.18	$3.05
Motor housing	$3.93	$2.95	$2.05	$1.25
Trimmer head	$1.25	$0.75	$1.00	$0.65
String feeder system	$1.05	$1.25	$1.50	$1.40
Total	$9.50	$13.41	$11.78	$7.20
Total retrieval				$3.93

Table 1

$\begin{array}{c}\text{Revenue retrieval amount}=\$9.50+\$13.41-\$11.78-\$7.20\\ =\$3.93\end{array}$

The revenue retrieval amount is calculated by subtracting all the costs involved from the resale revenue obtained which is $3.93.

Calculate the revenue retrieval amount for PM:

Part	Resale revenue per unit	Recycling revenue per unit	Processing cost per unit	Disposal cost per unit
Metal frame	$3.18	$3.95	$1.15	$0.65
Battery	$0.00	$2.58	$4.98	$2.90
Motor housing	$4.05	$3.45	$2.45	$1.90
Trimmer head	$1.05	$0.85	$1.10	$0.75
String feeder system	$1.05	$1.25	$1.50	$1.40
Total	$9.33	$12.08	$11.18	$7.60
Total retrieval				$2.63

Table 2

$\begin{array}{c}\text{Revenue retrieval amount}=\$9.33+\$12.08-\$11.18-\$7.60\\ =\$2.63\end{array}$

The revenue retrieval amount is calculated by subtracting all the costs involved from the resale revenue obtained which is $2.63.

Hence, the revenue retrieval amount for GF Deluxe is $3.93 and PM is $2.63.

b)

Summary Introduction

To determine: The better model in terms of design.

Answer to Problem 13P

The better model in terms of design is GF Deluxe.

Explanation of Solution

Given information:

GF Deluxe:

Part	Resale revenue per unit	Recycling revenue per unit	Processing cost per unit	Disposal cost per unit
Metal frame	$3.27	$4.78	$1.05	$0.85
Battery	$0.00	$3.68	$6.18	$3.05
Motor housing	$3.93	$2.95	$2.05	$1.25
Trimmer head	$1.25	$0.75	$1.00	$0.65
String feeder system	$1.05	$1.25	$1.50	$1.40

PM:

Part	Resale revenue per unit	Recycling revenue per unit	Processing cost per unit	Disposal cost per unit
Metal frame	$3.18	$3.95	$1.15	$0.65
Battery	$0.00	$2.58	$4.98	$2.90
Motor housing	$4.05	$3.45	$2.45	$1.90
Trimmer head	$1.05	$0.85	$1.10	$0.75
String feeder system	$1.05	$1.25	$1.50	$1.40

From Table 1 and 2, it can be inferred that GF Deluxe has better design alternatives in terms of revenue retrieval because it has the highest revenue retrieval.

Hence, the GF Deluxe is the better design alternative because it has a higher revenue retrieval opportunity when compared to PM.