Two currently owned machines are being considered for the production of a part. The capital investment associated with the machines is about the same and can be ignored. The important differences between the machines are their production capacities (production rate × available production hours) and their reject rates (percentage of parts produced that cannot be sold). Consider the following table:
| Machine A | Machine B | |
|---|---|---|
| Production rate | 100 parts/hour |
130 parts/hour |
| Hours available for production | 7 hours/day | 6 hours/day |
| Percent parts rejected | 3% |
10% |
The material cost is $6.00 per part, and all defect-free parts
produced can be sold for $12 each. (Rejected parts have negligible
scrap value.) For either machine, the operator cost is $15.00 per
hour and the variable overhead rate for traceable costs is $5.00
per hour.
(a) Assume that the daily demand for this part is large enough that
all defect-free parts can be sold. Which machine should be
selected? (b) What would the percent of parts rejected have to be
for Machine B to be as profitable as Machine A?
In: Economics
Texas-Q Company produces and sells barbeque grills. Texas-Q sells three models: a small portable gas grill, a larger stationary gas grill, and the specialty smoker. In the coming year, Texas-Q expects to sell 21,200 portable grills, 58,300 stationary grills, and 5,300 smokers. Information on the three models is as follows:
| Portable | Stationary | Smokers | |
| Price | $95 | $201 | $249 |
| Variable cost | |||
| Per unit | 50 | 129 | 139 |
Total fixed cost is $2,358,760.
Required:
1. What is the sales mix of portable grills to stationary grills to smokers?
2. Compute the break-even quantity of each product.
3. Prepare an income statement for Texas-Q for the coming year. What is the overall contribution margin ratio? Use the contribution margin ratio to compute overall break-even sales revenue. Enter the contribution margin ratio as a percentage rounded to two decimal places; round the break-even sales revenue to the nearest dollar.
4. Compute the margin of safety for the coming year.
In: Accounting
"An automaker is considering installing a three-dimensional (3-D) computerized car-styling system at a cost of $262,000 (including hardware and software). With the 3-D computer modeling system, designers will have the ability to view their design from many angles and to fully account for the space required for the engine and passengers. The digital information used to create the computer model can be revised in consultation with engineers, and the data can be used to run milling machines that make physical models quickly and precisely. The automaker expects to decrease the turnaround time for designing a new automobile model (from configuration to final design) by 25%. The expected savings in dollars is $263,000 per year. The training and operations and maintenance cost for the new system is expected to be $61,000 per year. The system has a five-year useful life and can be depreciated according to the five-year MACRS class. The system will have an estimated salvage value of $6,300. The automaker's marginal tax rate is 39.3%. Compute the rate of return of the project. Enter your answer as a percentage between 0 and 100."
In: Economics
An $18 000 car will have a scrap value of $500 9 years from the date of purchase. 1) Using the constant-percentage depreciation method, determine the book value of the car at the end of 4 years. 2)If money can be invested at j12 = 6%, what is the monthly sinking-fund deposit necessary to replace the car if it is sold for its book value in (a) after 4 years and the price of new cars has increased at an annual rate of j1 = 5%? 3) An identical car can be leased for 4 years at a cost of $405 paid at the beginning of each month. The contract calls for the driver to pay for fuel, repairs, licences, and maintenance (but not for insurance). If the car is bought, there will be a cost of $800 at the time of purchase for 1 year of insurance, with insurance costs increasing by 4% at the beginning of each of the next 3 years. Still using j12 = 6%, determine whether it is more economical to buy or lease the car over a 4-year period. Assume that it can be sold for the book value found in a) if you buy the car. Only #3 plz
In: Finance
Question 4:
Sprinkler Co. utilizes process costing in its manufacturing
company for a product that passes through two departments. Data
relating to the product processed in Department 2, during March are
presented as follows:
Beginning WIP Inventory had total costs of $119,000. Of this
amount, $19,000 related to direct materials. The remainder related
to conversion costs.
During the period, the following costs were added: $62,080 of
direct materials and $396,240 of conversion costs.
Additional information is available as follows:
|
Physical Units |
Percentage of Completion |
|
|
Beginning WIP |
6,000 |
10% – direct materials 40% – conversion costs |
|
Units brought into production and fully completed during period |
29,000 |
|
|
Ending WIP |
11,000 |
40% - direct materials 50% - conversion costs |
Required:
a. Compute the equivalent units for the month for Department 2,
according to the FIFO method of accounting for
units.
b. Calculate the cost per equivalent unit using the FIFO
method of costing. Round answer to two decimal
places.
c. Prepare a cost reconciliation report for the period for
Department 2 using the FIFO method of costing.
In: Accounting
"An automaker is considering installing a three-dimensional (3-D) computerized car-styling system at a cost of $279,000 (including hardware and software). With the 3-D computer modeling system, designers will have the ability to view their design from many angles and to fully account for the space required for the engine and passengers. The digital information used to create the computer model can be revised in consultation with engineers, and the data can be used to run milling machines that make physical models quickly and precisely. The automaker expects to decrease the turnaround time for designing a new automobile model (from configuration to final design) by 18%. The expected savings in dollars is $249,000 per year. The training and operations and maintenance cost for the new system is expected to be $53,000 per year. The system has a five-year useful life and can be depreciated according to the five-year MACRS class. The system will have an estimated salvage value of $6,600. The automaker's marginal tax rate is 36.3%. Compute the rate of return of the project. Enter your answer as a percentage between 0 and 100."
In: Finance
Finance question
"An automaker is considering installing a three-dimensional (3-D) computerized car-styling system at a cost of $292,000 (including hardware and software). With the 3-D computer modeling system, designers will have the ability to view their design from many angles and to fully account for the space required for the engine and passengers. The digital information used to create the computer model can be revised in consultation with engineers, and the data can be used to run milling machines that make physical models quickly and precisely. The automaker expects to decrease the turnaround time for designing a new automobile model (from configuration to final design) by 15%. The expected savings in dollars is $215,000 per year. The training and operations and maintenance cost for the new system is expected to be $61,000 per year. The system has a five-year useful life and can be depreciated according to the five-year MACRS class. The system will have an estimated salvage value of $7,500. The automaker's marginal tax rate is 39.2%. Compute the rate of return of the project. Enter your answer as a percentage between 0 and 100."
In: Finance
Texas-Q Company produces and sells barbeque grills. Texas-Q sells three models: a small portable gas grill, a larger stationary gas grill, and the specialty smoker. In the coming year, Texas-Q expects to sell 16,200 portable grills, 59,400 stationary grills, and 5,400 smokers. Information on the three models is as follows:
| Portable | Stationary | Smokers | |
|---|---|---|---|
| Price | $89 | $195 | $253 |
| Variable cost | |||
| per unit | 45 | 131 | 140 |
Total fixed cost is $2,078,310.
| Required: | |
| 1. | What is the sales mix of portable grills to stationary grills to smokers? |
| 2. | Compute the break-even quantity of each product. |
| 3. | Prepare an income statement for Texas-Q for the coming year. What is the overall contribution margin ratio? Use the contribution margin ratio to compute overall break-even sales revenue. Enter the contribution margin ratio as a percentage rounded to two decimal places; round the break-even sales revenue to the nearest dollar. |
| 4. | Compute the margin of safety for the coming year. |
In: Accounting
Texas-Q Company produces and sells barbeque grills. Texas-Q sells three models: a small portable gas grill, a larger stationary gas grill, and the specialty smoker. In the coming year, Texas-Q expects to sell 19,200 portable grills, 43,200 stationary grills, and 4,800 smokers. Information on the three models is as follows:
|
Portable |
Stationary |
Smokers |
|
| Price | $92 | $205 | $251 |
| Variable cost | |||
| per unit | 44 | 127 | 138 |
Total fixed cost is $2,175,120.
| Required: | |
| 1. | What is the sales mix of portable grills to stationary grills to smokers? |
| 2. | Compute the break-even quantity of each product. |
| 3. | Prepare an income statement for Texas-Q for the coming year. What is the overall contribution margin ratio? Use the contribution margin ratio to compute overall break-even sales revenue. Enter the contribution margin ratio as a percentage rounded to two decimal places; round the break-even sales revenue to the nearest dollar. |
| 4. | Compute the margin of safety for the coming year. |
In: Accounting
Texas-Q Company produces and sells barbeque grills. Texas-Q sells three models: a small portable gas grill, a larger stationary gas grill, and the specialty smoker. In the coming year, Texas-Q expects to sell 13,800 portable grills, 50,600 stationary grills, and 4,600 smokers. Information on the three models is as follows:
|
Portable |
Stationary |
Smokers |
|
| Price | $89 | $204 | $253 |
| Variable cost | |||
| per unit | 50 | 134 | 143 |
Total fixed cost is $2,163,490.
| Required: | |
| 1. | What is the sales mix of portable grills to stationary grills to smokers? |
| 2. | Compute the break-even quantity of each product. |
| 3. | Prepare an income statement for Texas-Q for the coming year. What is the overall contribution margin ratio? Use the contribution margin ratio to compute overall break-even sales revenue. Enter the contribution margin ratio as a percentage rounded to two decimal places; round the break-even sales revenue to the nearest dollar. |
| 4. | Compute the margin of safety for the coming year. |
In: Accounting