Current Attempt in Progress Ivanhoe Company operates a small factory in which it manufactures two products: C and D. Production and sales results for last year were as follows. C D Units sold 9,000 19,900 Unit selling price $94 $75 Unit variable costs 53 39 Unit fixed costs 20 20 For purposes of simplicity, the firm averages total fixed costs over the total number of units of C and D produced and sold. The research department has developed a new product (E) as a replacement for product D. Market studies show that Ivanhoe Company could sell 11,100 units of E next year at a price of $115; unit variable costs of E are $42. The introduction of product E will lead to a 11% increase in demand for product C and discontinuation of product D. If the company does not introduce the new product, it expects next year's results to be the same as last year's. Compute company profit with products C & D and with products C & E. Net profit with products C & D $ Net profit with products C & E $ Should Ivanhoe Company introduce product E next year?

Current Attempt in Progress Ivanhoe Company operates a small factory in which it manufactures two products: C and D. Production and sales results for last year were as follows. C D Units sold 9,000 19,900 Unit selling price $94 $75 Unit variable costs 53 39 Unit fixed costs 20 20 For purposes of simplicity, the firm averages total fixed costs over the total number of units of C and D produced and sold. The research department has developed a new product (E) as a replacement for product D. Market studies show that Ivanhoe Company could sell 11,100 units of E next year at a price of $115; unit variable costs of E are $42. The introduction of product E will lead to a 11% increase in demand for product C and discontinuation of product D. If the company does not introduce the new product, it expects next year's results to be the same as last year's. Compute company profit with products C & D and with products C & E. Net profit with products C & D $ Net profit with products C & E $ Should Ivanhoe Company introduce product E next year?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter13: The Balanced Scorecard: Strategic-based Control

Section: Chapter Questions

Problem 8E: Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its...

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Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its products is 65 minutes per unit. The budgeted conversion costs for the manufacturing cell dedicated to the product are 12,960,000 per year. The total labor minutes available are 1,440,000. During the year, the cell was able to produce 0.6 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs. Required: 1. Compute the theoretical conversion cost per unit. 2. Compute the applied conversion cost per minute (the amount of conversion cost actually assigned to the product). 3. Discuss how this approach to assigning conversion cost can improve delivery time performance. Explain how conversion cost acts as a performance driver for on-time deliveries.
I have submitted the same question twice and it has been resolved two different times with different results. Could you please have a look again into this? Jaime Ltd manufactures and sells a small electric product to order for the computer industry. The estimated selling price and variable costs per unit for next year are as follows: (£ per unit) Selling price 654.00 Variable costs: Direct materials 216.00 Direct labour 108.00 Production overhead 54.00 Selling & distribution overhead 27.00 Jaime Ltd expects to sell 108,000 units next year. Jaime Ltd expects the stock level at the start of the year to be NIL and the stock at the end of the year to be 18,000 units. Information on fixed costs is as follows: Fixed costs: £ Production overhead 1,452,000 Selling & distribution 360,000 Administration overhead 342,000…
Tharp Company operated a small factory in which it manufactures two products: C and D Production and sale results for last year were as follows. C D Unit Sold 9000 20,000 Selling Price $95 $75 VC per unit $0 $40 FC per unit 24 24 For purpose and simplicity, the firm averages total fixed costs over the total number of units of C and D produced and sold. The research department has developed an new product E as a replacement for product D. Market studies show that Tharp Company could sell 10,000 unit of E next year at price of $115. The variable cost per unit of E is $45. The introduction of product E will lead to a 10% increase of demand of product C and a discontinuation of product D. If the company does not introduce the new product, it expects next year's result to be the same as last year's. Should Tharp Company should introduce Product E next year? Explain why or why not. Show your calculations clearly.
Roland Company operates a small factory in which it manufactures two products: A and B. Production and sales result for last year were as follow: A B Units sold 8,000 16,000 Selling price per unit 65 52 Variable costs per unit 35 30 Fixed costs per unit 15 15 For purposes of simplicity, the firm allocates total fixed costs over the total number of units of A and B produced and sold. The research department has developed a new product (C) as a replacement for product B. Market studies show that Roland Company could sell 11,000 units of C next year at a price of $80, the variable costs per unit of C are $39. The introduction of product C will lead to a 10% increase in demand for product A and discontinuation of product B. If the company does not introduce the new product, it expects next year’s result to be the same as last year’s. Instructions Should Roland Company introduce product C next year? Explain why or why not. Show calculations to support your decision
The Nikki Beat Company operates a small factory in which it manufactures two products, AG and BD. Production and sales results for the last year were as follows: AG BDUnits sold 8,000 20,000Unit selling price $95 $78Unit variable cost 50 45Unit fixed cost 22 22 Fixed costs are spread over the total number of units of AG and BD produced and sold.The research department has developed a new product, CF, as a replacement to product BD.Market studies show that Nikki Beat Company could sell 11,000 units of CF next year at a price of $120; the variable costs per unit of CF are $42. The introduction of product CF will lead to a ten percent increase in demand for product AG and discontinuation of product BD. If the firm does not introduce the new product, the firm expects next year’s results to be the same as last year’s.Required: Prepare a financial…
ETS manufactures a component for its computer products. The annual demand for thiscomponent is 2500 units. The annual cost of maintaining inventory is10% per unit and the cost of preparing an order and setting up productionfor the order is $ 50.The machine used to make this part has a production rate of 10,000units per year and the cost is $ 22 per unit.a. Find the EPQ(Economic Production Quantity)A. How long does it take to produce the batch?B. How many batches will be produced per year?C. What is the maximum inventory level?D. What is the total cost per year?E. A supplier offers to sell a similar component for $ 25 per unit with a charge$ 5 per service per order. Should the company accept the offer?F. Find the average inventory level for each situation
The Mad Hatter Company owns a machine that manufactures two types of chimney caps. Production time is .20 hours for cap A and .40 hours for cap B. The machine's capacity is 2,000 hours per year. Both products are sold to a single customer who has agreed to buy all of the company's output up to a maximum of 1,000 units of cap A and 6,000 units of cap B. Selling prices and variable costs per unit are shown below. Based on this information, what is Mad Hatter's most profitable sales mix? Cap A Cap BSelling price per unit $ 80 $ 60 Variable costs per unit 53 42
Parker Pottery produces a line of vases and a line of ceramic figurines. Each line uses the sameequipment and labor; hence, there are no traceable fixed costs. Common fixed cost equals$30,000. Parker’s accountant has begun to assess the profitability of the two lines and has gathered the following data for last year: Required:1. Compute the number of vases and the number of figurines that must be sold for thecompany to break even.2. Parker Pottery is considering upgrading its factory to improve the quality of its products.The upgrade will add $5,260 per year to total fixed cost. If the upgrade is successful, theprojected sales of vases will be 1,500, and figurine sales will increase to 1,000 units. Whatis the new break-even point in units for each of the products?
CleanTech manufactures equipment to mitigate the environmental effects of waste. (a) If Product A has fixed expenses of $15,000 per year and each unit of product has a $0.20 variable cost, and Product B has fixed expenses of $5000 per year and a $0.50 variable cost, at what number of units of annual production will A have the same overall cost as B? (b) As a manager at CleanTech what other data would you need to evaluate these two products?
Perfect Furniture is a manufacturer of kitchen tables andchairs. Th e company is currently deciding between two newmethods for making kitchen tables. Th e fi rst process is estimatedto have a fi xed cost of $80,000 and a variable cost of $75 per unit.Th e second process is estimated to have a fi xed cost of $100,000and a variable cost of $60 per unit.(a) Graphically plot the total costs for both methods.Identify which ranges of product volume are best foreach method.(b) If the company produces 500 tables a year, which methodprovides a lower total cost?
The Bremer Co. manufactures cordless telephones Bremer is planning to implement a JIT production system, which requires annual tooling costs of $150,000. Bremer estimates that the following annual benefits would arise from JIT production. a. Average inventory will decline by $700,000 from $900,000 to $200,00 b. Insurance, space, materials handling, and setup costs, which currently total $200,00 would decline by 30% c. The emphasis on quality inherent in JIT system would reduce rework costs by 20% Bremer currently incurs $350,000 on rework. d. Better quality would eneble Bremer to raise the prices of its products by $3 per unit. Bremer sells $30,000 unit each year. Bremer required rate of return on inventory investment is 12% per year Required: Calculate the net benefit or cost to the Bremer Corporation From implementing a JIT production system.
On-the-Go, Inc., produces two models of traveling cases for laptop computers—the Programmer and the Executive. The bags have the following characteristics. Programmer Executive Selling price per bag $ 70 $ 100 Variable cost per bag $ 30 $ 40 Expected sales (bags) per year 8,000 12,000 The total fixed costs per year for the company are $819,000. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix is the same at the break-even point, compute the break-even point. c. If the product sales mix were to change to nine Programmer-style bags for each Executive-style bag, what would be the new break-even volume for On-the-Go?