The catering manager of LaVista Hotel, Lisa Ferguson, is disturbed by the amount of silverware she is losing every week. Last Friday night, when her crew tried to set up for a banquet, they did not have enough knives. She decides she needs to order some more silverware, but wants to take advantage of any quantity discounts her vendor will offer.
>For a small order (2,000 pieces or less) her vendor quotes a price of $1.80/piece.
>If she orders 2,001 to 5,000 pieces, the price drops to $1.60/piece.
>5,001 to 10,000 pieces brings the price to $1.40/piece, and
>10,001 and above reduces the price to $1.25/piece.
Lisa's order costs of $205 per order, her annual holding costs are 5%, and the annual demand is 44,600 pieces. For the best option, (the best option is the price leve that results in an EOQ within the acceptable range).
A) What is the optimum ordering quantity?
B) What is the annual holding cost?
C) What is the annual ordering cost?
D) What are the annual cost of the silverware with an optimal order quantity?
E) What is the total annual cost, including ordering, holding, and purchasing the silverware?
In: Operations Management
Beantown Baseball Company makes baseballs that sell for $13 per two-pack. Current annual production and sales are 576,000 baseballs. Costs for each baseball are as follows:
| Direct material | $2.00 |
| Direct labor | 1.25 |
| Variable overhead | 0.50 |
| Variable selling expenses | 0.25 |
| Total variable cost | $4.00 |
| Total fixed overhead | $750,000 |
a. Calculate the unit contribution margin in dollars and the
contribution margin ratio for the company.
Note: Round percentage to two decimal places (for
example, round 32.5555% to 32.56%).
Unit contribution margin in dollars
Contribution margin ratio
b. Determine the break-even point in number of baseballs.
c. Calculate the dollar break-even point using the contribution
margin ratio.
Note: Round amount to the nearest whole
dollar.
d. Determine the company’s margin of safety in number of baseballs,
in sales dollars, and as a percentage.
Note: Round margin of safety percentage to two
decimal places (for example, round 32.555% to 32.56%).
Margin of safety in baseballs:
Margin of safety in dollars:
Margin of safety percentage:
e. (1) Compute the company’s degree of operating leverage.
Note: Round amount to two decimal places (for
example, round 32.555 to 32.56).
Degree of operating leverage
(2) If sales increase by 30 percent, by what percentage would
pre-tax income increase?
Note: Round to the nearest whole percentage point
(for example, round 24.5% to 25%).
Percentage increase in pre-tax income
f. How many baseballs must the company sell if it desires to earn
$657,600 in pretax profit?
g. If the company wants to earn $450,000 after tax and is subject
to a 40 percent tax rate, how many baseballs must be sold?
h. How many baseballs would the company need to sell to break even
if its fixed cost increased by $30,000? (Use original data.)
i. Beantown Baseball Company has received an offer to provide a
one-time sale of 12,000 baseballs at $8.80 per two-pack to the
Lowell Spinners. This sale would not affect other sales, nor would
the cost of those sales change. However, the variable cost of the
additional units would increase by $0.20 for shipping, and fixed
cost would increase by $3,600. Based solely on financial
information, should the company accept this offer? Would this
amount be an incremental pre-tax profit or loss?
Note: Do not use a negative sign with your
answer.
$
The company should accept or reject the offer?
In: Accounting
Please solve in excel
Reep Construction recently won a contract for the excavation and site preparation of a new rest area on the Pennsylvania Turnpike. In preparing his bid for the job, Bob Reep, founder and president of Reep Construction, estimated that it would take four months to perform the work and that 10, 12, 14, and 8 trucks would be needed in months 1 through 4, respectively. The firm currently has 20 trucks of the type needed to perform the work on the new project. These trucks were obtained last year when Bob signed a long-term lease with PennState Leasing. Although most of these trucks are currently being used on existing jobs, Bob estimates that one truck will be available for use on the new project in month 1, two trucks will be available in month 2, three trucks will be available in month 3, and one truck will be available in month 4. Thus, to complete the project, Bob will have to lease additional trucks. The long-term leasing contract with PennState charges a monthly cost of $600 per truck. Reep Construction pays its truck drivers $20 an hour, and daily fuel costs are approximately $100 per truck. All maintenance costs are paid by PennState Leasing. For planning purposes, Bob estimates that each truck used on the new project will be operating eight hours a day, five days a week for approximately four weeks each month. Bob does not believe that current business conditions justify committing the firm to ad- ditional long-term leases. In discussing the short-term leasing possibilities with PennState Leasing, Bob learned that he can obtain short-term leases of one to four months. Short-term leases differ from long-term leases in that the short-term leasing plans include the cost of both a truck and a driver. Maintenance costs for short-term leases also are paid by PennState Leas- ing. The following costs for each of the four months cover the lease of a truck and driver: Length of Lease Cost per Month 1 $ 4000 2 $ 3700 3 $ 3225 4 $ 3040 Bob Reep would like to acquire a lease that minimizes the cost of meeting the monthly trucking requirements for his new project, but he also takes great pride in the fact that his company has never laid off employees. Bob is committed to maintaining his no-layoff policy; that is, he will use his own drivers even if costs are higher. Managerial Report Perform an analysis of Reep Construction's leasing problem and prepare a report for Bob Reep that summarizes your findings. Be sure to include information on and analysis of the following items:
1. The optimal leasing plan
2. The costs associated with the optimal leasing plan
3. The cost for Reep Construction to maintain its current policy of no layoffs
In: Operations Management
Heating, Ventilating and Air Conditioning (HVAC) Systems create and maintain the levels of comfort required by guests and employees. HVAC systems must be properly selected, operated and maintained if they are they are to provide an appropriate level of comfort.
How do you think a hotel building stays cool?
In: Operations Management
Discuss four risks that your company is likely to be exposed to if it goes ahead with debt finance as a source of finance and explain with 5 points how this decision will affect the return to the equity holders or shareholders of your company (hotel) following the arguments of M&M proposition 2.
In: Finance
In: Economics
Define each of the following resources.
7.1. Central park:
7.2. I-95 interstate thruway from Maine to Florida:
7.3. Fish in a stream in NY State:
7.4. US Navy medical hospital supply ship now docked in NYC:
7.5. Zoom:
In: Economics
How can TV Networks and Broadway
plays use revenue management?
"Revenue management is an extremely important concept within the hospitality industry, because it allows hotel owners to anticipate demand and optimise availability and pricing, in order to achieve the best possible financial results"
In: Finance
"Arrival and Registration" Briefly describe a hotel with which you are familiar and make at least one recommendation for improvement regarding its registration procedure. come up with a way to mitigate the frustration customers feel when they need to wait at registration. Please be as creative as you like.
In: Operations Management
Create a Database Schema for a hotel reservation system. indicate the Primary Keys, Foreign Keys, and the one-to-one or one-to-many relationships between the tables. Also describe in a small paragraph the scope of the back-end database, by explaining the different tables and their relations in your schema.
In: Computer Science