Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost.
Last year, the company sold 32,000 of these balls, with the following results:
| Sales (32,000 balls) | $ | 800,000 |
| Variable expenses | 480,000 | |
| Contribution margin | 320,000 | |
| Fixed expenses | 211,000 | |
| Net operating income | $ | 109,000 |
5. Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company’s new CM ratio and new break-even point in balls?
6. Refer to the data in (5) above.
a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $109,000, as last year?
b. Assume the new plant is built and that next year the company manufactures and sells 32,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage.
In: Accounting
******PLEASE COMPLETE ALL PARTS*****
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Costs |
$900 million/year first three years |
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Construction costs: |
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Operating costs: |
$80 million/year |
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Agricultural product lost from flooded lands: |
$65 million/year |
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Forest products lost from flooded lands: |
$40 million/year |
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Benefits |
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Revenues from Power Generation |
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Hydropower generated: |
4 billion Kilowatt hours/year |
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Price of electricity: |
$0.125/Kilowatt hour |
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Revenues from Irrigation Services |
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Irrigation water available from the dam: |
200K Acre-Feet |
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Price of water: |
$700/Acre-Foot |
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In: Finance
Distinguish between the remote and near environments. How do each support the strategic planning process?
Distinguish between the remote and near environments. How do each support the strategic planning process?
In: Economics
Lincoln Park Zoo in Chicago is considering a renovation that will improve some physical facilities at a cost of $1,800,000. Addition of new species will cost another $310,000. Additional maintenance, food, and animal care and replacement will cost $145,000 in the 1st year, increasing by 3 % each year thereafter. The zoo has been in operation since 1868 and is expected to continue indefinitely; however, it is common to use a 20-year planning horizon on all new investments. Salvage value on facilities after 20 years will be 40 % of initial cost. Interest is 7 %. An estimated 1.5 million visits per year are made to the zoo, and the cost remains free year-round. How much additional benefit per visit, on average, must the visitors perceive to justify the renovation? ..............$
Carry all interim calculations to 5 decimal places and then round your final answer to 2 decimal places. The tolerance is ±0.01.
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In accounting, what are the main similarities and differences between a 200 rooms of 3 stars hotel and a 200 slots of 3 stars camping sites?
In: Accounting
writing pretend you are working in a hotel busness place describe how would you apply use ethic to be successfull as an employee in that workplace
In: Operations Management
Identify (3) three revenue management “factors” that will have an impact on a hotel with respect to optimizing revenue generation. Explain and elaborate each concept.
In: Operations Management
Can a hotel or restaurant increase or maintain customer satisfaction after implementing its first revenue management program? Explain your answer.
In: Accounting
There are 3 short answer questions in this paper. Type your answers where indicated. Your answers can be in bullet point form.
A local resort in the Blue Mountains is for sale.
Type answer here
The government has identified an area of the national park near the resort that they are going to release for sale for development to raise money. The sale of the land is being done by sealed bid auction with the government committee deciding which offer to accept based on several criteria including the amount offered as well as the plans for development. You find out that someone on the committee is trying to solicit a kickback of 15% to award the contract.
Type answer here
The resort monitors all the sales and COGS in each of the departments and they noticed that COGS have been increasing in the restaurant without any change in the revenues.
What are some of the possible explanations for the increasing COGS? How would you investigate fraud-related potential explanations?
In: Accounting
An S corporation converted from a C corporation in 20X2 has the following: Built-in gains of $20,000 Taxable income, computed as if the corporation were a C corporation of $30,000 What is the built-in gains tax?
A. $3,000
B. $4,500
C. $7,000
D. $10,500
In: Accounting