Hickory Company manufactures two products—15,000 units of Product Y and 7,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all $597,000 of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z:
| Activity Cost Pool | Activity Measure | Estimated Overhead Cost | Expected Activity | ||
| Machining | Machine-hours | $ | 213,400 | 11,000 | MHs |
| Machine setups | Number of setups | $ | 61,600 | 140 | setups |
| Product design | Number of products | $ | 78,000 | 2 | products |
| General factory | Direct labor-hours | $ | 244,000 | 13,200 | DLHs |
| Activity Measure | Product Y | Product Z |
| Machine-hours | 6,400 | 4,600 |
| Number of setups | 60 | 80 |
| Number of products | 1 | 1 |
| Direct labor-hours | 7,400 | 5,800 |
12. Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z? (Round your "Percentage" answers to 2 decimal places.)
13. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z? (Round your "Percentage" answers to 2 decimal places.)
14. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z?
15. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? (Round your "Percentage" answers to 2 decimal place.)
In: Accounting
Hickory Company manufactures two products—15,000 units of Product Y and 7,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all $597,000 of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z:
| Activity Cost Pool | Activity Measure | Estimated Overhead Cost | Expected Activity | ||
| Machining | Machine-hours | $ | 213,400 | 11,000 | MHs |
| Machine setups | Number of setups | $ | 61,600 | 140 | setups |
| Product design | Number of products | $ | 78,000 | 2 | products |
| General factory | Direct labor-hours | $ | 244,000 | 13,200 | DLHs |
| Activity Measure | Product Y | Product Z |
| Machine-hours | 6,400 | 4,600 |
| Number of setups | 60 | 80 |
| Number of products | 1 | 1 |
| Direct labor-hours | 7,400 | 5,800 |
12. Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z? (Round your "Percentage" answers to 2 decimal places.)
13. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z? (Round your "Percentage" answers to 2 decimal places.)
14. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z?
15. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? (Round your "Percentage" answers to 2 decimal place.)
MAKE SURE ANSWERS ARE ALL PERCENTAGES!
In: Accounting
Total sales $120,000
Food & Beverage $24,000
Total expenses $84,000
Cost of Food and Beverage based on total sale (total sale * percentage = cost of food and beverage)
What percentage of Cost of Food and Beverage is needed to increase the Battle of the Chefs event's net profit by 10%?
(Hint: Create a formula to calculate the 10% increase, then use Goal Seek.)
In: Accounting
You company wants to build a new small plant that will cost $90,000,000 to construct. You will
pay the construction engineering firm $45,000,000 today and another $45,000,000 at the end of the first year of construction. The plant will be finished 24 months from the start of construction. Each year of operation, the plant will take charges of $5,000,000 per year at the beginning of the year for raw materials, labor, and maintenance. Each year of operation, the plant will take credits of $20,000,000 in sales revenues at the end of the year. If the company requires a MARR of 15% and the plant is expected to have a life of 15 years of production, answer the following questions:
a. What is the simple Payback Period for this project ignoring the effects of time value of money? b. What is the NPV of this project using the MARR? c. What is the Discounted Payback Period of this project using the MARR? d. What is the IRR for this project?
In: Finance
You company wants to build a new small plant that will cost $90,000,000 to construct. You will
pay the construction engineering firm $45,000,000 today and another $45,000,000 at the end of the first year of construction. The plant will be finished 24 months from the start of construction. Each year of operation, the plant will take charges of $5,000,000 per year at the beginning of the year for raw materials, labor, and maintenance. Each year of operation, the plant will take credits of $20,000,000 in sales revenues at the end of the year. If the company requires a MARR of 15% and the plant is expected to have a life of 15 years of production, answer the following questions:
a. What is the simple Payback Period for this project ignoring the effects of time value of money? b. What is the NPV of this project using the MARR? c. What is the Discounted Payback Period of this project using the MARR? d. What is the IRR for this project?
In: Finance
In 2017, a website reported that only 10% of surplus food is being recovered in the food-service and restaurant sector, leaving approximately 1.5 billion meals per year uneaten. Assume this is the true population proportion and that you plan to take a sample survey of 575 companies in the food service and restaurant sector to further investigate their behavior.
(a)
Show the sampling distribution of
p,
the proportion of food recovered by your sample respondents.
A bell-shaped curve is above a horizontal axis labeled p.
A bell-shaped curve is above a horizontal axis labeled p.
A bell-shaped curve is above a horizontal axis labeled p.
A bell-shaped curve is above a horizontal axis labeled p.
(b)
What is the probability that your survey will provide a sample proportion within ±0.03 of the population proportion? (Round your answer to four decimal places.)
(c)
What is the probability that your survey will provide a sample proportion within ±0.015 of the population proportion? (Round your answer to four decimal places.)
In: Statistics and Probability
In 2017, a website reported that only 10% of surplus food is being recovered in the food-service and restaurant sector, leaving approximately 1.5 billion meals per year uneaten. Assume this is the true population proportion and that you plan to take a sample survey of 575 companies in the food service and restaurant sector to further investigate their behavior.
(a)
Show the sampling distribution of
p,
the proportion of food recovered by your sample respondents.
A bell-shaped curve is above a horizontal axis labeled p.
A bell-shaped curve is above a horizontal axis labeled p.
A bell-shaped curve is above a horizontal axis labeled p.
A bell-shaped curve is above a horizontal axis labeled p.
(b)
What is the probability that your survey will provide a sample proportion within ±0.03 of the population proportion? (Round your answer to four decimal places.)
(c)
What is the probability that your survey will provide a sample proportion within ±0.015 of the population proportion? (Round your answer to four decimal places.)
In: Statistics and Probability
You may need to use the appropriate appendix table or technology to answer this question.
In 2017, a website reported that only 10% of surplus food is being recovered in the food-service and restaurant sector, leaving approximately 1.5 billion meals per year uneaten. Assume this is the true population proportion and that you plan to take a sample survey of 535 companies in the food service and restaurant sector to further investigate their behavior.
(a)
Show the sampling distribution of
p,
the proportion of food recovered by your sample respondents.
A bell-shaped curve is above a horizontal axis labeled p.
A bell-shaped curve is above a horizontal axis labeled p.
A bell-shaped curve is above a horizontal axis labeled p.
A bell-shaped curve is above a horizontal axis labeled p.
(b)
What is the probability that your survey will provide a sample proportion within ±0.03 of the population proportion? (Round your answer to four decimal places.)
(c)
What is the probability that your survey will provide a sample proportion within ±0.015 of the population proportion? (Round your answer to four decimal places.)
In: Statistics and Probability
4. The relationship between marginal and average costs
Consider the following scenario to understand the relationship between marginal and average values. Suppose Larry is a professional basketball player, and his game log for free throws can be summarized in the following table.
Fill in the columns with Larry's free-throw percentage for each game and his overall free-throw average after each game.
|
Game |
Game Result |
Season Total |
Game Free-Throw Percentage |
Average Free-Throw Percentage |
|---|---|---|---|---|
| 1 | 6/8 | 6/8 | 75 | 75 |
| 2 | 2/8 | 8/16 | ||
| 3 | 2/4 | 10/20 | ||
| 4 | 8/10 | 18/30 | ||
| 5 | 8/10 | 26/40 |
On the following graph, use the orange points (square symbol) to plot Larry's free-throw percentage for each game individually, and use the green points (triangle symbol) to plot his overall average free-throw percentage after each game. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. Game Free-Throw PercentageAverage Free-Throw Percentage0123451009080706050403020100FREE-THROW PERCENTAGEGAME You can think of the result in any one game as being Larry's marginal free-throw percentage. Based on your previous answer, you can deduce that when Larry's marginal free-throw percentage is above the average, the average must be . You can now apply this analysis to production costs. For a U-shaped average total cost curve, when the marginal cost curve is below the average total cost curve, the average total cost must be . Also, when the marginal cost curve is above the average total cost curve, the average total cost must be . Therefore, the marginal cost curve intersects the average total cost curve . |
In: Economics
12-A2 Customer Profitability
The following table gives sales, product cost, and cost-to-serve data for a company that makes three product lines: A, B, and C. The company has two customer types.
| PRODUCT A | PRODUCT B | PRODUCT C | |
| Sales | $5,000 | $6,000 | $25,000 |
| Cost of Sales | 4,500 | 4,800 | 15,000 |
| Customer Type 1 | Customer Type 2 | Customer Type 3 | |
| Product A Sales | $500 | $4,500 | $5,000 |
| Product B Sales | 1,000 | 5,000 | 6,000 |
| Product C Sales | 13,000 | 12,000 | 25,000 |
| Manager Visits | 4 | 16 | 20 |
The cost to serve all customers is $12,000 and is allocated to
customer types based on the number of manager visits to customer
locations for pre- and post-sales support.
1. Determine the gross profit margin percentage of sales for each
product. Which product is the most profitable?
2. Determine the gross profit margin and the gross profit margin
percentage of sales for each customer type.
3. Determine the cost-to-serve percentage of sales for each
customer type.
4. Determine the operating income and operating income percentage of sales for each customer type.
5. Which customer is the most profitable based the following profitability measures:
a. Grossmargin
b. Gross margin percentage of sales
c. Operating income
d. Operating income percentage of sales
In: Accounting