Patricia Zell, a dollmaker from Olney, Maryland, is interested in the mass marketing and production of a ceramic doll of her own design called Tiny Trisha. The initial investment required for plant and equipment is estimated at $25,000. Labor and material costs are approximately $10 per doll. If the dolls can be sold for $50 each, what volume of demand is necessary for the Tiny Trisha doll to break even?
Want to see the full answer?
Check out a sample textbook solutionChapter 6 Solutions
Operations and Supply Chain Management 9th edition
Additional Business Textbook Solutions
Principles of Operations Management: Sustainability and Supply Chain Management (10th Edition)
Operations Management: Sustainability and Supply Chain Management (12th Edition)
Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
Business in Action (8th Edition)
Operations Management: Processes and Supply Chains (11th Edition)
- Product A has a fixed cost of $5,000 and a variable cost of $5 per unit, it can sell for $20 per unit. Product B has a fixed cost of $8,000 and a variable cost of $9 per unit, it can sell for $30 per unit. Company plans to produce 381 units of either A or B. Which product should be produced?arrow_forwardConcord, Inc. is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $12, while the cost of assembling each unit is estimated at $14. Unassembled units can be sold for $59, while assembled units could be sold for $65 per unit. What decision should Concord make? Process further; the company will save $8 per unit. Sell before assembly; the company will save $8 per unit. Sell before assembly; the company will save $4 per unit. Process further; the company will save $6 per unit.arrow_forwardA contractor has agreed to build 10 dog houses in 20 days at a price of $800 per unit. 10 days later, the contractor has finished 6 dog houses with an actual total cost of $5,200. What is the cost variance CV (CV = BCWP-ACWP)? $800 C$400 $-1,200 $600arrow_forward
- As the production planner for Xiangling Hu Products, Inc., you have been given a bill of material for a bracket that is made up of a base, 2 springs, and 4 clamps. The base is assembled from 1 clamp and 1 housing. Each clamp has 1 handle and 2 castings. Each housing has 1 bearing and 2 shafts. There is no inventory on hand. Part 2 a) Design a product structure noting the quantities for each item and show the low-level coding. Match each number in the structure below with the corresponding item. Number Item I Spring Subscript left parenthesis 2 right parenthesisSpring(2) II Housing Subscript left parenthesis 1 right parenthesisHousing(1) III Casting Subscript left parenthesis 2 right parenthesisCasting(2) IV Shaft Subscript left parenthesis 2 right parenthesisShaft(2) Bracket Base(1) Clamp(1) Handle(1) Clamp(4) Bearing(1) Handle(1) Casting(2) IIIIIIIV Part 3 b) Determine the…arrow_forwardAs the production planner for Xiangling Hu Products, Inc., you have been given a bill of material for a bracket that is made up of a base, two springs, and four clamps. The base isassembled from one clamp and two housings. Each clamp has one handle and one casting. Each housing has two bearings and one shaft. There is no inventory on hand.a) Design a product structure noting the quantities for each item and show the low-level coding.b) Determine the gross quantities needed of each item if you are to assemble 50 brackets.c) Compute the net quantities needed if there are 25 of the base and 100 of the clamp in stock.arrow_forwardTrumps Inc. has developed a chew-proof dog bed-the Tuff Pup. Fixed costs are P 204,000 per year. The average price for the Tuff-Pup is P 36, and the average variable cost is P 22 per unit. Currently, Trumps produces and sells 20,000 Tuff-Pups annually. Required: How many Tuff-Pups must be sold to break-even? If Trumps wants to earn P95,000 in profit, how many Tuff-Pups must be sold? Prepare a variable-costing income statement to verify your answer. Suppose that Trumps would like to lower the break-even units to 12,000. The company does not believe that the price or fixed cost can be changed. Calculate the new unit variable cost that would result in break-even units of 12,000 units. (Round to the nearest cent). What is Trumps current contribution margin and operating income? Calculate the degree of operating leverage (round your answer to four decimal places.) If sales increased by 10% next year, what would the present change in operating income be?arrow_forward
- As the production planner for Xiangling Hu Products, Inc., you have been given a bill of material for a bracket that is made up of a base, 1 spring, and 3 clamps. The base is assembled from 2 clamp and 1 housing. Each clamp has 1 handle and 1 casting. Each housing has 2 bearing and 2 shaft. There is no inventory on hand. Part 2 a) Design a product structure noting the quantities for each item and show the low-level coding. Match each number in the structure below with the corresponding item. Number Item I Bracket II Spring Subscript left parenthesis 1 right parenthesis III Clamp Subscript left parenthesis 3 right parenthesis IV Bearing Subscript left parenthesis 2 rightarrow_forwardHow low must the variable cost per unit be to break even, based on current prices and sales forecasts?arrow_forwardRitz Products's materials manager, Tej Dhakar, must determine whether to make or buy a new semiconductor for the wrist TV that the firm is about to produce. One million units are expected to be produced over the life cycle. If the product is made, start-up and production costs of the make decision total $3 million, with a probability of 0.4 that the product will be satisfactory and a 0.6 probability that it will not. If the product is not satisfactory, the firm will have to reevaluate the decision. If the decision is reevaluated, the choice will be whether to spend another $3 million to redesign the semiconductor or to purchase. Likelihood of success the second time that the make decision is made is 0.8. If the second make decision also fails, the firm must purchase. Regardless of when the purchase takes place, Dhakar's best judgment of cost is that Ritz will pay $0.40 for each purchased semiconductor plus $2 million in vendor development cost. Part 2 a) Assuming that…arrow_forward
- Your small toy manufacturing facility has the following information: Revenue per toy $2.29 Fixed costs $18,000 Material cost per toy $0.375 Electricity cost per toy $0.019 Labor cost per toy Break Even is defined as Revenue Total Cost %3D Given that we will sell 15,000 toys, what must the Labor cost per toy be to break even?arrow_forwardRitz Products's materials manager, Tej Dhakar, must determine whether to make or buy a new semiconductor for the wrist TV that the firm is about to produce. Four million units are expected to be produced over the life cycle. If the product is made, start-up and production costs of the make decision total $1 million, with a probability of 0.5 that the product will be satisfactory and a 0.5 probability that it will not. If the product is not satisfactory, the firm will have to reevaluate the decision. If the decision is reevaluated, the choice will be whether to spend another $1 million to redesign the semiconductor or to purchase. Likelihood of success the second time that the make decision is made is 0.8. If the second make decision also fails, the firm must purchase. Regardless of when the purchase takes place, Dhakar's best judgment cost is that Ritz will pay $0.50 for each purchased semiconductor plus $2 million in vendor development cost. a) Assuming that Ritz must have the…arrow_forwardRitz Products's materials manager, Tej Dhakar, must determine whether to make or buy a new semiconductor for the wrist TV that the firm is about to produce. Three million units are expected to be produced over the life cycle. If the product is made, start-up and production costs of the make decision total $1 million, with a probability of 0.5 that the product will be satisfactory and a 0.5 probability that it will not. If the product is not satisfactory, the firm will have to reevaluate the decision. If the decision is reevaluated, the choice will be whether to spend another $1 million to redesign the semiconductor or to purchase. Likelihood of success the second time that the make decision is made is 0.8. If the second make decision also fails, the firm must purchase. Regardless of when the purchase takes place, Dhakar's best judgment of cost is that Ritz will pay $0.40 for each purchased semiconductor plus $2 million in vendor development cost. a) Assuming that Ritz…arrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,Operations ManagementOperations ManagementISBN:9781259667473Author:William J StevensonPublisher:McGraw-Hill EducationOperations and Supply Chain Management (Mcgraw-hi...Operations ManagementISBN:9781259666100Author:F. Robert Jacobs, Richard B ChasePublisher:McGraw-Hill Education
- Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage LearningProduction and Operations Analysis, Seventh Editi...Operations ManagementISBN:9781478623069Author:Steven Nahmias, Tava Lennon OlsenPublisher:Waveland Press, Inc.