Question
In: Accounting
Sheldon industries Industries manufactures plastic bottles for the food industry. On average pays $ 73 per...
Sheldon industries Industries manufactures plastic bottles for the food industry. On average pays
$ 73
per ton for its plastics.
Sheldon'sSheldon's
waste-disposal company has increased its waste disposal-charge to
$ 50$50
per ton for solid and inert waste.
SheldonSheldon
generates a total of
500
tons of waste per month.
Sheldon'sSheldon's
managers have been evaluating the production processes for areas to cut waste. In the process of making plastic bottles, a certain amount of machine "drool" occurs. Machine drool is the excess plastic that "drips" off the machine between molds. In the past,
Sheldon
has discarded the machine drool. In an average month,
170
tons of machine drool is generated. Management has arrived at three possible courses of action for the machine drool issue:
LOADING...
(Click the icon to view the courses of action.)Read the requirements
LOADING...
.
Requirement 1. What is the annual cost of the machine drool currently? Include both the original plastic cost and the waste-disposal cost.
|
Annual cost |
|
|
Material cost of machine drool (plastic) |
|
|
Disposal cost |
|
|
Total annual cost |
Enter any number in the edit fields and then click Check Answer.
|
Clear All |
Check Answer |
More Info
|
1. |
Do nothing and pay the increased waste-disposal charge. |
|
2. |
Sell
the machine drool waste to a local recycler for
$10 per ton. |
|
3. |
Re-engineer the production process at an annual cost of
$40,000. This change in the production process would cause the amount of machine drool generated to be reduced by40% each month. The remaining machine drool would then be sold to a local recycler for$10 per ton. |
Requirements
|
1. |
What is the annual cost of the machine drool currently? Include both the original plastic cost and the waste-disposal cost. |
|
2. |
How much would the company save per year (net) if the machine drool were to be sold to the local recycler? |
|
3. |
How much would the company save per year (net) if the production process were to be re-engineered? |
|
4. |
What do you think the company should do? Explain your rationale. |
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Seldon Industries manufactures plastic bottles for the food industry. On average, SheldonSheldon pays $ 73$73 per...
Seldon Industries manufactures plastic bottles for the food
industry. On average,
SheldonSheldon
pays
$ 73$73
per ton for its plastics.
Sheldon'sSheldon's
waste-disposal company has increased its waste disposal-charge
to
$ 50$50
per ton for solid and inert waste.
SheldonSheldon
generates a total of
500500
tons of waste per month.
Sheldon'sSheldon's
managers have been evaluating the production processes for areas
to cut waste. In the process of making plastic bottles, a certain
amount of machine "drool" occurs. Machine drool is the...
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CHAP 22 Genie in a Bottle Company (GBC) manufactures plastic two-liter bottles for the beverage industry....
CHAP 22
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