200 HW#11 - CH PDF

5/7/13 200 HW#11 - Ch.
7 - Relevant Costs
Student: DavidMcBane Assignment: 200HW#11Ch.7RelevantCosts
TakeDetails
Assignmentscore: 93.33%
TotalTimespent: 4minutes,59seconds
Scoreforselectedtake: 93.33%(93.33/100)
Timespentonselectedtake:
1.
Correctanswer:
Decrease
J
3000 3000
Youranswer:
eBook eBook eBook eBook eBook eBook eBook eBook eBook eBook
BriefExercise72
MakeorBuyDecision
SwitzerCorporationmakesmotorcycleengines.Thecompany'srecordsshowthefollowingunitcoststo
manufacturepart#61645:
AnothermanufacturerhasofferedtosupplySwitzerCorporationwithpart#61645foracostof$50
perunit.Switzeruses1,000unitsannually.
Required:
IfSwitzeracceptstheoffer,whatwillbetheshortrunimpactonincome?
Decrease
by$
3000
sjc.cengagenow.com/ilrn/takeAssignment/viewAssignmentPrintableMain.do?assignmentId=700465640&takeId=0 1/11
5/7/13 200 HW#11 - Ch. 7 - Relevant Costs
2.
Correctanswer:
False
False
True
False
False
Youranswer:
BriefExercise74
ResourceUtilizationDecisionsandConstraints
Companiesregularlyfacelimitedresources.Maximizingtheutilizationofascarceresourceisakeyto
businesssuccess.Thefollowingstatementsrelatetoresourceutilizationdecisionsandthetheoryof
constraints.
Required:
Indicatewhethereachofthefollowingstatementsistrueorfalse.
a.Thegoalofaresourceutilizationdecisionistominimizethecontributionmarginperunitofthe
limitedresource.
False
b.Limitedresourceslikelyincludemoneyandrawmaterials,butdonotlikelyincludemachine
capacityordirectlabortimeavailable.
False
c.Decisionmakersshouldconsiderqualitativefactorswhenmakingresourceutilizationdecisions.
True
d.Oneofthemosteffectivewaysofincreasingthroughputistoincreasetheefficiencyofa
nonbottleneckoperation.
False
e.Bottlenecksarealwaysaresultofpoormanagementdecisions.
False
3.
Correctanswer:
8
Youranswer:
Exercise78
SpecialOrderPricingDecision
GreatFallsBrewery'sregularsellingpriceforacaseofbeeris$15.Variablecostsare$8percase,and
fixedcoststotal$2percase,basedonproductionof250,000cases.Thefixedcostsremainunchanged
withinarelevantrangeof50,000to300,000cases.Aftersalesof180,000caseswereprojectedfor
theyear,aspecialorderwasreceivedforanadditional30,000cases.
Required:
CalculateGreatFallsBrewery'sminimumacceptablesellingpriceforthespecialorderof30,000cases.
$
4.
Correctanswer:
Decrease
J
2000 2000
Youranswer:
Exercise710
MakeorBuy:EffectonIncome
Engstrom,Inc.,uses10,000poundsofaspecificcomponentintheproductionoflifepreserverseach
year.Presently,thecomponentispurchasedfromanoutsidesupplierfor$11perpound.Forsome
timenow,thefactoryhashadidlecapacitythatcouldbeutilizedtomakethecomponent.Engstrom's
costsassociatedwithmanufacturingthecomponentareasfollows:
Inaddition,ifthecomponentismanufacturedbyEngstrom,thecompanywillhireanewfactory
supervisoratanannualcostof$32,000.
Required:
IfEngstromchoosestomakethecomponentinsteadofbuyingitfromtheoutsidesupplier,what
wouldbethechange,ifany,inthecompany'sincome?
Decrease
by$
2000
5.
Correctanswer:
Decrease
J
4000 4000
Youranswer:
Exercise711
BasicMakeorBuyDecision
IceColdCorporationmakesdormsizerefrigerators.Thecompany'srecordsshowthefollowingunit
coststomanufacturepart#15498:
AnothermanufacturerhasofferedtosupplyIceColdCorporationwithpart#15498foracostof$60
perunit.IceColduses1,000unitsannually.
Required:
IfIceColdCorporationacceptstheoffer,whatwillbetheshortrunimpactonincome?
Decrease
by$
4000
6.
Correctanswer:
Decrease
J
15000 15000
Youranswer:
Exercise714
ImpactofDroppingaProductLine
LangerCompanyhasthreeproducts(A,B,andC)thatusecommonfacilities.Therelevantdata
concerningthesethreeproductsfollow:
Required:
IffixedcostsallocatedtoproductlineCarenotavoidableandifproductlineCisdropped,whatwillbe
theimpactonincome?
Decrease
of$
15000
7.
Correctanswer:
4.00
3.20
CompactDisc1
Youranswer:
Exercise716
LimitedResourceDecision
KerrieVelinskyProductionsproducesmusicvideosintwolengthsonseparatecompactdiscs.The
companycansellitsentireproductionofeitherproduct.Therelevantdataforthesetwoproducts
follow:
Totalfixedoverheadis$240,000.Thecompanyhasonly100,000machinehoursavailablefor
production.Becauseoftheconstraintonthemaximumnumberofmachinehours,Kerriemustdecide
whichCDtoproducetomaximizethecompany'sincome.
Required:
Computethecontributionmarginpermachinehourforeachcompactdisk.Roundtothenearestcent.
Compactdisk1:$
4:00
permachinehour
Compactdisk2:$
3:20
permachinehour
Whichproductshouldthecompanyselecttomaximizeoperatingprofits?
CompactDisc1
8.
Correctanswer:
137.50
140
0
3000
Youranswer:
Exercise718
MaximizingtheContributionMarginGivenaLimitedResource
FootballsGaloreproducesbothpigskinandartificialleatherfootballsthatarestitchedbyoneoftwo
machines.Selecteddatarelatedtoproducingabatchof10footballsforeachproductfollow:
Onlytwomachinesarecapableofstitchingthefootballs.Theyhaveamaximumcapacityof3,000total
stitchinghoursperyear.
Required:
A.Whatisthecontributionmarginperlimitedresourceforeachtypeoffootball?Roundyouranswer
tonearestcentifnecessary.
ContributionMargin
Pigskinfootball $
137.50
perstitchinghour
Artificialleatherfootball $
140
perstitchinghour
B.Assumingthatdemandisnotaconstraint,howmanypigskinandartificialleatherfootballbatches
shouldbeproducedbyFootballsGaloreconsideringavailablestitchinghoursasaconstraintresource?If
nobatchesofaproductshouldbeproduced,enter"0".
Production
PigSkinFootballs 0
batches
ArtificialLeatherFootballs 3000
batches
9.
Correctanswer:
Finishthechairs
40
25
15
Youranswer:
Exercise720
SellorProcessFurtherDecision
DePaulisFurnitureManufacturersmakesunfinishedfurnitureforsaletocustomersfromitsown
stores.Recently,thecompanyhasbeenconsideringtakingproductiononestepfurtherandfinishing
someofthefurnituretosellasfinishedfurniture.Toanalyzetheproblem,DePaulisisgoingtolookat
onlyoneproduct,averypopulardiningroomchair.Thechaircanbeproducednowfor$65andsellsfor
$85unfinished.IfDePaulisweretofinishthechair,thecostwouldincreaseto$90,butthecompany
couldsellthefinishedchairsfor$125.
Required:
ShouldDePaulisfinishthechairsorcontinuetosellthemunfinished?
Finishthechairs
Computethefollowinginsupportofyouranswer.Inputallamountsaspositivevalues.
Incrementalrevenueperchair $
40
Incrementalcostperchair 25
Incrementalprofitperchair $
15
10.
Correctanswer:
48
Makingthepart
50000
ThisshouldfurtherencourageJainSimmonstocontinuemakingthepart
Youranswer:
Problem723
MakeorBuyDecision:RelevantCostsandQualitativeFactors
JainSimmonsCompanyneeds10,000unitsofacertainparttobeusedinproduction.IfJainSimmons
buysthepartfromSullivanCompanyinsteadofmakingthepartitself,JainSimmonscouldnotuseits
presentfacilitiesforanothermanufacturingactivity.Sixtypercentofthefixedoverheadappliedwill
continueregardlessofwhatdecisionismade.Thefollowingquantitativeinformationisavailable
regardingthesituationpresented:
Required:
A.Indecidingwhethertomakeorbuythepart,whatareJainSimmons'stotalrelevantcoststomake
thepart?
$
48
perunit
B.Whichalternative(makeorbuy)ismoredesirableforJainSimmonsandbywhatamount?
Makingthepart
byatotalof$
50000
C.SupposethatJainSimmonsCompanyisinanareaofthecountrywithhighunemploymentand
thatitisunlikelythatdisplacedemployeeswillfindotheremployment.Howmightthataffectyour
decision?
ThisshouldfurtherencourageJainSimmonstocontinuemakingthepart

200 HW#11 - CH PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

200 HW#11 - CH PDF

Uploaded by

Copyright:

Available Formats

5/7/13 200 HW#11 - Ch.

Student: DavidMcBane Assignment: 200HW#11Ch.7RelevantCosts

You might also like