base capacity (in labor hours)
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The Patience Corporation operates six days a week (Monday – Saturday) on a two-eight hour
shifts. The plant which can complete ten (10) units per hour is closed twelve working days each
year for holidays, machines are repaired, oiled and cleaned for about 616 hours during the period.
Normal sales demand for its products averages 40,000 units a year over a five-year period. The
expected sales volume for the year is 35,000 units. The fixed costs amount to P210,000 per year.
REQUIRED:
1. Determine the base capacity (in labor hours) for each of the following: (a) maximum
capacity; (b) practical capacity; (c) normal capacity; (d) expected actual capacity
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- The Patience Corporation operates six days a week (Monday – Saturday) on a two-eight hourshifts. The plant which can complete ten (10) units per hour is closed twelve working days eachyear for holidays, machines are repaired, oiled and cleaned for about 616 hours during the period.Normal sales demand for its products averages 40,000 units a year over a five-year period. Theexpected sales volume for the year is 35,000 units. The fixed costs amount to P210,000 per year. REQUIRED:A. Compute the fixed costs per hour under each of the four capacities B. Compute the idle capacity costs under each of the four capacities if the plant operates at3,400 hours.IT Company produces and sell boxes of sign pens for P1,000 per box. Direct materials are P400 per box and direct manufacturing labor averages P75 per box. Variable overhead is P25 per box and fixed overhead is P12,500,000 per year. Administrative expenses, all fixed, run P4,500,000 per year, with sales commissions of P100 per box. Production is expected to be 100,000 boxes, which is met every year. For the year just ended, 75,000 boxes were sold. What is the inventoriable cost per box using full costing? A.P770B.P500C.P475D.P625HIRAP corp. is capable of turning out 15 completed units evry 30 sec. The plant normally operates 5 days a week on two eight hour shift. each year the factory is closed 12 working days holiday. machinery is idle 750 hours for cleaning, oiling and maintenance. Normal sales averages 110,000 units a year over a five year period. the expected sales volume for the year is 112,500 units. the fixed cost of operating the plant amounted to 385,000 per year. a. compute the idle capacity cost under normal capacity if the plant operated at 3,400 hours/ b. compute the fixed unit cost under practical capacity
- Macagba Company uses 1,100 units of an particular item each year. Carrying the item in inventory costs $200 per unit per year. It costs $150 for each order of the chemical. Macagba uses the item at a constant rate each year. Calculate the Economic Order Quantity. 40.62 Use the data from above and assume that Macagba Company operates 250 days per year. Also assume that its total usage is 1,100 units per year. There is a lead time of 2 days and Macagba desires to keep a safety stock of 4 units. Calculate the reorder point.Aziz Company sells two types of products, basic and deluxe. The company provides technical support for users of its products at an expected cost of $270,000 per year. The company expects to process 10,000 customer service calls per year. Required: 1. Determine the company's cost of technical support per customer service call. 2. During the month of January, Aziz received 570 calls for customer service on its deluxe model and 270 calls for customer service on its basic model. Assign technical support costs to each model using activity-based costing (ABC). Assign technical support costs to each model Model Activity Rate Deluxe Basic Cost driver quantity incurred Allocated CostVale Corporation sells Product 'MAGNETITE' and Product 'HEMATITE', the sales of both products are occurring evenly throughout the year. Product 'MAGNETITE The annual demand for it, is 700,000 units and an order for new inventory is placed each month. Each order costs OMR55 to place. The cost of holding Product 'MAGNETITE' in inventory is 100 baisa per unit per year. Buffer inventory equal to 40% of one month's sales is maintained. Product 'HEMATITE The annual demand for it, is 956,000 units per year and Vale Corporation buys this product at OMR1 per unit on 60 days credit. The supplier has offered an early settlement discount of 1% for settlement of invoices within 30 days. Other information Vale Corporation finances working capital with short-term finance costing 7% per year. Assume that there are 365 days in each year. Required: Identify the objectives of working capital management and discuss the central role of working capital management in financial management in the light of…
- Qinto Company sells two types of products, basic and deluxe. The company provides technical support for users of its products at an expected cost of $250,000 per year. The company expects to process 10,000 customer service calls per year. 1. Determine the company’s cost of technical support per customer service call. 2. During the month of January, Qinto received 650 calls for customer service on its deluxe model and 150 calls for customer service on its basic model. Assign technical support costs to each model using activity-based costing (ABC).TS Co has daily demand for ball bearings of 40 a day for each of the 250 working days (50 weeks) of the year. The ball bearings are purchased from a local supplier for $2 each. The cost of placing an order is $64 per order, regardless of the size of the order. The inventory holding costs, expressed as a percentage of inventory purchase price, is 25% per annum. What is the economic order quantity?PepsiCo sells its soft drinks in approximately 400,000 retail establishments, such as supermarkets, discount stores, and convenience stores. Sales representatives call on each retail account weekly, which means each account is called on by a sales rep 52 times per year. The average length of a sales call is 75 minutes (or 1.25 hours). An average salesperson works 2,000 hours per year (50 weeks per year * 40 hours per week), but each spends 10 hours a week on non-selling activities, such as administrative tasks and travel. How many salespeople does PepsiCo need?
- The Candy Factory Company manufactures candy that is sold to food distributors. The company produces at full capacity for six months each year to meet peak demand during the "candy season" from Halloween through Valentine's Day. During the other six months of the year, the manufacturing facility operates at 75% of capacity. The Candy Factory Company provides the following data for the year: (Click the icon to view the data.) The Candy Factory Company receives an offer to produce 12000 cases of candy for a special event. This is a one-time opportunity during a period when the company has excess capacity. What is the minimum selling price The Candy Factory Company should accept for the order? Explain why. The minimum selling price that Candy Factory Company should accept for the special order is the C In this situation, the are not relevant because they will be incurred whether the order is accepted or not. is appropriate in this situation. Data table Cases of candy produced and sold…The Decker Company maintains a fleet of 10 service trucks and crews that provide a variety of plumbing, heating, and cooling repair services to residential customers. Currently, it takes on average about six hours before a service team responds to a service request. Each truck and crew averages 12 service calls per week, and the average revenue earned per service call is $150. Each truck is in service 50 weeks per year. Owing to the diffi culty in scheduling and routing, there is considerable slack time for each truck and crew during a typical week. In an effort to more efficiently schedule the trucks and crews and improve their productivity, Decker management is evaluating the purchase of a prewritten routing and scheduling soft ware package. The benefits of the system will include reduced response time to service requests and more productive service teams, but management is having trouble quantifying these benefits. One approach is to make an estimate of how much service response…Crawford Steel Corp. buys inventory of 40,000 units annually. The purchase price per unit is $3.00 and delivery time takes 2 weeks after the order is placed. The ordering cost is $40 per order. The storing and insurance cost of the inventory per quarter is 20 percent of the purchase price. Based on the sales records, it normally maintains its safety stock of 4,500 units. Order should be placed in 100 units and 50 weeks is in a year. Calculate: the economic order quantity. the total cost of holding inventory. the inventory level should reorder be made. the number of orders that will be placed annually.