2.3. Reconsider the Wyndor Glass Co. case study introduced in Section 2.1. Suppose that Bill Tasto (Wyndor's vicepresident for manufacturing) now has found a way to provide a little•⚫ additional production time in Plant 2 to the new products.a. Use the graphical method to find the new optimal solution and the resulting total profit if one additionalhour per week is provided.Production Time Usedfor Each Unit ProducedPlant12Doors1 hour33 hoursUnit profit$300Windows02 hours2 hours$500Available per Week4 hours12 hours18 hours

Approach to Solving the Question:1. Understanding the Problem Context:The problem involves…

Answered: 2.3. R econsider the Wyndor Glass Co.…

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 25E

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Q1.Determine the production plan that will maximise the weekly profit of MJD Ltd and prepare a profit statement showing the profit your plan will yield. Q2.The marketing director of MJD Ltd is concerned about the company’s ability to meet the quantity demanded by its customers. Two alternative strategies are being considered to overcome this: To increase the number of hours worked using the existing machinery by working overtime. Such overtime would be paid at a premium of 50% above normal labour rates, and variable overheads costs would be expected to increase in proportion to labour costs. To buy product B from an overseas supplier at a cost of £19 per unit; which includes the cost of delivery. This purchased product would need to be repackaged at a cost of £1 per unit before it can be sold Evaluate each of the two alternative strategies and write a report to the marketing director discussing which strategy should be adopted.
Consider the following information for a given business. Sale revenue =GHS40,000 VC per unit =GHS20 Activity level =1,000 to break even Required: 1. Determine the TFC 2. Express the contribution as a percentage of sale. 3. The company plans to sale 1,500 unit in the next period. What will be the percentage margin of safety (MoS) 4. What margin should the business employ for planning purposes? 5. What total profit should the business expect in order to achieve it's planned sales?
Lakeside Incorporated produces a product that currently sells for $62 per unit. Current production costs per unit include direct materials, $16.5; direct labor, $18.5; variable overhead, $11.5; and fixed overhead, $11.5. Product engineering has determined that certain production changes could refine the product quality and functionality. These new production changes would increase material and labor costs by 20% per unit. Required: a. What would be the incremental profit or loss if Lakeside could sell the refined version of its product for $68 per unit? Note: Do not round your intermediate calculations. Round your final answer to 2 decimal places. Loss amounts should be indicated with a minus sign. b. Should it be processed further? a. Incremental Profit (Loss) b. Should it be processed further?
D 2) Contribution Margin The following information is supplied about one of the company’s main products and management wants to analyse the contribution that this product is making to the overall profitability of the company. You are asked to determine the following: The Contribution Margin Ratio of the product The Break Even Point in dollars for the product The Margin of Safety in Units and Dollars If the company wishes to increase its total dollar contribution margin by 40% in the next year, by how much will sales need to be increased if all the other costs remain the same.
Sammamish Brick, Inc., manufactures bricks using clay deposits on the company's property. Raw clays are blended and then extruded into molds to form unfired bricks. The unfired bricks are then stacked onto movable metal platforms and rolled into the kiln where they are fired until dry. The dried bricks are then packaged and shipped to retail outlets and contractors. The bottleneck in the production process is the kiln, which is available for 2,200 hours per year. Data concerning the company's four main products appear below. Products are sold by the pallet. Gross revenue per pallet Contribution margin per pallet Annual demand (pallets) Hours required in the kiln per pallet Traditional Brick $769 $480 75 10 Textured Facing $1,331 $ 620 Cinder Block $608 $388 85 4 Roman Brick $886 $455 95 10 150 No fixed costs could be avoided by modifying how much is produced of any product. Required: 1a. Calculate the total hours required in the kiln to satisfy demand for all products. Traditional…
Suppose that you are the manager of a studio cafe, and you are planning to invest on a new camera and a coffee maker designed to increase the productivity of your employees and output (services) produced. Your analyst provided you the following information: A. Complete the table below. Current Projected Sales and Profit Incremental Situation Revenues and Costs Total Revenue Php1,500,000 Php1,800,000 Variable Cost 575,000 425,000 Direct Fixed Costs 625,000 700,000 Indirect Fixed Costs 100,000 100,000 Profit B. Should the new camera and coffee maker be purchased? Explain your answer based on the incremental analysis.
Question 1. A company wants to produce a new product. In order to produce this product, the fixed cost is $40,000 and the variable cost is $15 per product. a. Assume that the purchase price for the product is $55, and the estimated demand for this product is 2000 units. Then, what is your suggestion to the company? To produce or not, and if yes, how many? [provide your reasonings] b. Answer part (a) but with an estimated demand of 900 units. [provide your reasonings] c. Assume that demand depends on the purchase price so that it would be 1000 and 2000 if the purchase price is $100 and $55 respectively. Then, what purchase price do you suggest to the company? [provide your reasonings]
Lakeside Incorporated produces a product that currently sells for $70 per unit. Current production costs per unit include direct materials, $18.5; direct labor, $20.5; variable overhead, $13.5; and fixed overhead, $13.5. Product engineering has determined that certain production changes could refine the product quality and functionality. These new production changes would increase material and labor costs by 20% per unit. Required: a. What would be the incremental profit or loss if Lakeside could sell the refined version of its product for $76 per unit? Note: Do not round your intermediate calculations. Round your final answer to 2 decimal places. Loss amounts should be indicated with a minus sign. b. Should it be processed further? > Answer is complete but not entirely correct. a. Incremental Profit (Loss) b. Should it be processed further? $ Yes 2.20 x
D 2) Contribution Margin The following information is supplied about one of the company’s main products and management wants to analyse the contribution that this product is making to the overall profitability of the company. (d) If the company wishes to increase its total dollar contribution margin by 40% in the next year, by how much will sales need to be increased if all the other costs remain the same.
Required information Exercise 6-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume [LO6-4] [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below Per Unit $ 140 Percent of Sales 100% Selling price Variable expenses 91 65 Contribution margin $ 49 35% Fixed expenses are $88,000 per month and the company is selling 3,000 units per month.
Below information were provided to you in order to analyze and solve below questions; Monthly Fixed Factory Overhead Cost = P250,000 Monthly Fixed Selling Overhead Cost = P50,000 Variable Manufacturing Cost per Unit = P80 Variable Selling Cost per Unit = P20 Selling Price per unit = P120 Determine the Break-even point in terms of sales value and in units. b. How many units must be sold to earn a profit of P100,000? The management plan to increase both the selling price and variable cost by 5%. What is the new Breakeven point? a. с.
Use the following data to solve problem #2: - Fixed costs $2,500 - Variable cost per unit $1.00 - Selling price per unit $6.00 - Run a simulation for production runs in increments of 100 (run 15) - At what production level in the company profitable - What is the amount of profit? - What is the maximum profit under these conditions - Show all work on a spreadsheet

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