If you visit a construction site, which quality aspects should you check with respect to structural concrete?

As a Construction engineer and the project is ongoing!

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 $674,000 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:

Make-or-Buy Decision

Zion Manufacturing had always made its components in-house. However, Bryce Component Works had recently offered to supply one component, K2, at a price of $26 each. Zion uses 10,000 units of Component K2 each year. The cost per unit of this component is as follows:

Assume that 75% of Zion Manufacturing's fixed overhead for Component K2 would be eliminated if that component were no longer produced.

Required:

1. CONCEPTUAL CONNECTION: If Zion decides to purchase the component from Bryce, by how much will operating income increase or decrease?
$

Which alternative is better?

2. CONCEPTUAL CONNECTION: Briefly explain how increasing or decreasing the 75% figure affects Zion’s final decision to make or purchase the component.

As the percentage of avoidable fixed cost increases (above 75%), total relevant costs of making the component increase, causing the “purchase” decision to be financially appealing (compared to the “make” option) than it was when the percentage was 75%. In other words, as the percentage increases, difference between the “purchase” and “make” options increases resulting in the “purchase” decision being even attractive. Alternatively, as the percentage of avoidable fixed costs decreases, the “make” option eventually is costly and appealing financially as the “purchase” option. Finally, as the percentage of avoidable fixed cost decreases low enough and the total relevant costs of making the component decrease, the option becomes the more financially appealing option

3. CONCEPTUAL CONNECTION: By how much would the per-unit relevant fixed cost have to decrease before Zion would be indifferent (i.e., incur the same cost) between “making” versus “purchasing” the component?

$

Zion Manufacturing had always made its components in-house. However, Bryce Component Works had recently offered to supply one component, K2, at a price of $28 each. Zion uses 13,000 units of Component K2 each year. The cost per unit of this component is as follows:

Assume that 75% of Zion Manufacturing's fixed overhead for Component K2 would be eliminated if that component were no longer produced.

Required:

1. CONCEPTUAL CONNECTION: If Zion decides to purchase the component from Bryce, by how much will operating income increase or decrease?
  $

Which alternative is better?

2. CONCEPTUAL CONNECTION: Briefly explain how increasing or decreasing the 75% figure affects Zion’s final decision to make or purchase the component.

As the percentage of avoidable fixed cost increases (above 75%), total relevant costs of making the component increase, causing the “purchase” decision to be________ financially appealing (compared to the “make” option) than it was when the percentage was 75%. In other words, as the percentage increases, difference between the “purchase” and “make” options increases resulting in the “purchase” decision being even ________ attractive. Alternatively, as the percentage of avoidable fixed costs decreases, the “make” option eventually is ______ costly and ________ appealing financially as the “purchase” option. Finally, as the percentage of avoidable fixed cost decreases low enough and the total relevant costs of making the component decrease, the ______ option becomes the more financially appealing option

3. CONCEPTUAL CONNECTION: By how much would the per-unit relevant fixed cost have to decrease before Zion would be indifferent (i.e., incur the same cost) between “making” versus “purchasing” the component?

$

Make-or-Buy Decision

Zion Manufacturing had always made its components in-house. However, Bryce Component Works had recently offered to supply one component, K2, at a price of $25 each. Zion uses 10,000 units of Component K2 each year. The cost per unit of this component is as follows:

Assume that 75% of Zion Manufacturing’s fixed overhead for Component K2 would be eliminated if that component were no longer produced.

Required:

1. CONCEPTUAL CONNECTION: If Zion decides to purchase the component from Bryce, by how much will operating income increase or decrease?
Increase $fill in the blank 2

Which alternative is better?

2. CONCEPTUAL CONNECTION: Briefly explain how increasing or decreasing the 75% figure affects Zion’s final decision to make or purchase the component.

As the percentage of avoidable fixed cost increases (above 75%), total relevant costs of making the component increase, causing the “purchase” decision to be   financially appealing (compared to the “make” option) than it was when the percentage was 75%. In other words, as the percentage increases, difference between the “purchase” and “make” options increases resulting in the “purchase” decision being even   attractive. Alternatively, as the percentage of avoidable fixed costs decreases, the “make” option eventually is   costly and   appealing financially as the “purchase” option. Finally, as the percentage of avoidable fixed cost decreases low enough and the total relevant costs of making the component decrease, the   option becomes the more financially appealing option

3. CONCEPTUAL CONNECTION: By how much would the per-unit relevant fixed cost have to decrease before Zion would be indifferent (i.e., incur the same cost) between “making” versus “purchasing” the component?
$fill in the blank 9

Chapter:7 (Book - Business and legal principles)  

Q: legal issue in construction

What single most important fact about a subcontract distinguishes it from a purchase order? What may be provided by the subcontractor in addition to on-site labor? Must the work of a construction subcontract necessarily be directly and completely spelled out in the prime construction contract? May it be? Cite examples.

1. The construction industry in Japan has traditionally been dominated by its domestic suppliers. Few foreign construction companies have won projects in Japan. What aspects of Japan's political forces may have influenced this local control over the Japanese construction market? What political or regulatory forces may lead to the opening of this market for foreign firms?

Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the investment of $1,600,000 in assets. The costs of producing and selling 5,000 units of flat panel displays are estimated as follows: 1 Variable costs per unit: 2 Direct materials $122.00 3 Direct labor 32.00 4 Factory overhead 48.00 5 Selling and administrative expenses 34.00 6 Total variable cost per unit $236.00 7 Fixed costs: 8 Factory overhead $247,000.00 9 Selling and administrative expenses 146,000.00 Crystal Displays Inc. is currently considering establishing a selling price for flat panel displays. The president of Crystal Displays has decided to use the cost-plus approach to product pricing and has indicated that the displays must earn a 17% return on invested assets. Required: 1. Determine the amount of desired profit from the production and sale of flat panel displays. 2. Assuming that the product cost method is used, determine (a) the cost amount per unit, (b) the markup percentage, and (c) the selling price of flat panel displays.* 3. (Appendix) Assuming that the total cost method is used, determine (a) the cost amount per unit, (b) the markup percentage and (c) the selling price of flat panel displays.* 4. (Appendix) Assuming that the variable cost method is used, determine (a) the cost amount per unit, (b) the markup percentage, and (c) the selling price of flat panel displays.* 5. Comment on any additional considerations that could influence establishing the selling price for flat panel displays. 6. Assume that as of August 1, 3,000 units of flat panel displays have been produced and sold during the current year. Analysis of the domestic market indicates that 2,000 additional units are expected to be sold during the remainder of the year at the normal product price determined under the product cost method. On August 3, Crystal Displays Inc. received an offer from Maple Leaf Visual Inc. for 600 units of flat panel displays at $228 each. Maple Leaf Visual Inc. will market the units in Canada under its own brand name, and no variable selling and administrative expenses associated with the sale will be incurred by Crystal Displays Inc. The additional business is not expected to affect the domestic sales of flat panel displays, and the additional units could be produced using existing factory, selling, and administrative capacity. a. Prepare a differential analysis of the proposed sale to Maple Leaf Visual Inc. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter “0”. A colon (:) will automatically appear if required. b. Based on the differential analysis in part (a), should the proposal be accepted? *Round your markup percentage and selling price to two decimal places. Labels Cash flows from operating activities Costs Amount Descriptions Cash payments for merchandise Cash received from customers Fixed manufacturing costs Income (loss) Revenues Variable manufacturing costs 1. Determine the amount of desired profit from the production and sale of flat panel displays. $272,000.00 Points: 1 / 1 2. Assuming that the product cost method is used, determine (a) the cost amount per unit, (b) the markup percentage, and (c) the selling price of flat panel displays. Round your markup percentage and selling price to two decimal places. Cost amount per unit $ Markup percentage % Selling price $ Points: 0 / 3 3. (Appendix) Assuming that the total cost method is used, determine (a) the cost amount per unit, (b) the markup percentage, and (c) the selling price of flat panel displays. Round your markup percentage and selling price to two decimal places. Cost amount per unit $ Markup percentage % Selling price $ Points: 0 / 3 4. (Appendix) Assuming that the variable cost method is used, determine (a) the cost amount per unit, (b) the markup percentage, and (c) the selling price of flat panel displays. Round your markup percentage and selling price to two decimal places. Cost amount per unit $ Markup percentage % Selling price $ Points: 0 / 3 5. Comment on any additional considerations that could influence establishing the selling price for flat panel displays. The cost-plus approach price computed above should be viewed as a general guideline for establishing long-run normal prices; however, other considerations, such as the price of competing products and general economic conditions of the market place Correct , could lead management to establish a different short-run price. Points: 1 / 1 Check My Work 1. Multiply the desired profit percentage by the desired amount (invested assets). 2. a. Divide the total manufacturing costs (direct labor, direct materials, and factory overhead) by the number of units produced. b. Divide the desired profit plus the total selling and administrative expenses by the total manufacturing costs. c. Add cost (a) and markup [(a) x (b)]. 3. a. Divide all variable and fixed costs by the number of units produced. b. Divide the desired profit by the total costs. c. Add cost (a) and markup [(a) x (b)]. 4. a. Multiply the variable cost amount per unit by the number of units produced. b. Divide the desired profit plus the total fixed costs by the total variable costs. c. Add cost (a) and markup[(a) x (b)]. 5. What other factors influence pricing decisions? 6a. Prepare a differential analysis of the proposed sale to Maple Leaf Visual Inc. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter “0”. A colon (:) will automatically appear if required. Question not attempted. Score: 0/53 Differential Analysis Reject (Alternative 1) or Accept (Alternative 2) Order August 3 1 Reject Order Accept Order Differential Effect on Income 2 (Alternative 1) (Alternative 2) (Alternative 2) 3 4 (Label) 5 6

Vertical Analysis of Income Statement

Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows:

       Current Year        Previous Year
Sales $450,000 $387,000
Cost of goods sold 270,000 212,850
Selling expenses 72,000 69,660
Administrative expenses 76,500 61,920
Income tax expense 13,500 15,480

a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. If required, round percentages to one decimal place. Enter all amounts as positive numbers.

Innovation Quarter Inc.
Comparative Income Statement
For the Years Ended December 31
Current year Amount Current year Percent Previous year Amount Previous year Percent
Sales $450,000 % $387,000 %
Cost of goods sold 270,000 % 212,850 %
$ % $ %
Selling expenses 72,000 % 69,660 %
Administrative expenses 76,500 % 61,920 %
$ % $ %
% %
Income tax expense 13,500 % 15,480 %
$ % $ %

b. The vertical analysis indicates that the cost of goods sold as a percent of sales   by 5 percentage points, while selling expenses   by 2 percentage points, and administrative expenses   by 1 percentage points. Thus, net income as a percent of sales   by 3 percentage points.

Vertical Analysis of Income Statement

Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows:

a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. If required, round percentages to one decimal place. Enter all amounts as positive numbers.

b. The vertical analysis indicates that the cost of goods sold as a percent of sales   by 8 percentage points, while selling expenses   by 4 percentage points, and administrative expenses   by 1 percentage points. Thus, net income as a percent of sales   by 3 percentage points.