14.7. A company in Calgary serves a market in the northwestern United States. Now it ships LTL at an average cost of $30 per unit. If the company establishes a distribution center in the market, it estimates the TL cost will be $15 per unit, inventory carrying costs will be $5 per unit, and the local LTL cost will average $7 per unit. If the company forecasts annual demand at 200,000 units, how much will they save annually?
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- Ndapandula Investment CC sells about 12 000 bags of poulty grain per year. The Holding costs are N$ 50.00 per bag per year, and the Ordering costs are about N$ 100.00 per order. The Investment company operates 280 days per year. Determine: I. The optimal economic order quantity. II. The total annual inventory costs III. If the demand increases to 13 000 bags per year, what will the total annual inventory costs amount to?Sundial, Inc., produces two models of sunglasses-AU and NZ. the sunglasses have the following characteristics. Au NZ Selling price per unit $ 160 $ 160 Variable cost per unit $ 80 $ 60 Expected units sold per year 70,000 30,000 The total fixed costs per year for the company are $3,612,000. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix is the same at the break-even point, compute the break-even point. c. If the product sales mix were to change to four pairs of UA sunglasses for each pair of NZ sunglasses, what would be the new break-even volume for Sundial, Inc? Complete the question by entering your answers in the tabs below. Required A What is the…ABC Company manufactures the product XE-17. The product is sold at a unit price of $70.Variable expenses are $13.50 per unit and fixed expenses are $220,000 per year.Required :a. What should be the product’s CM ratio? b. Calculate the BEP is sales dollars and in units for ABC Company. c. The manager of ABC company estimates that in the coming year, the company’s sales willincrease by $80,000 (from the current sales). How much should the net profit / loss increase/decrease if the fixed costs remain constant? d. The manager of ABC company predicts that by spending an additional $80,000 per year onadvertising and using higher quality raw material (which will in turn increase the raw materialcost per unit by $3), and increasing selling price per unit by 2% (to compensate for theincreased costs), unit sales will increase by two- thirds of the current sales units. Should thecompany go with the manager’s proposed plan? Explain your answer. (Assume that in thecurrent year, the company sold…
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- Derby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics. Sales price $ 18 per unit Variable costs 7 per unit Fixed costs 27,000 per month Assume that the projected number of units sold for the month is 7,000. Consider requirements (b), (c), and (d) independently of each other. Required: a. What will the operating profit be? b. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent? c. What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? d. Suppose that fixed costs for the year are 10 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much?K Allen's Ark sells 2,000 canoes per year at a sales price of $470 per unit. Allen's sells in a highly competitive market and uses target pricing. The company has calculated its target full product cost at $740,000 per year. Total variable costs are $250,000 per year and cannot be reduced. Assume all products produced are sold. What are the target fixed costs? OA. $940,000 OB. $200,000 OC. $250,000 OD. $490,000 GEZOSDerby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics. Sales price $ 21 per unit Variable costs 7 per unit Fixed costs 27,000 per month Assume that the projected number of units sold for the month is 7,000. consider requirements (b), (c), and (d) independently of each other. Required: a. What will the operating profit be? B. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent? c. What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? d. suppose that fixed costs for the year are 10 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much? complete this question by entering your…
- Derby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics. Sales price $ 21 per unit Variable costs 7 per unit Fixed costs 27,000 per month Assume that the projected number of units sold for the month is 7,000. consider requirements (b), (c), and (d) independently of each other. Required: a. What will the operating profit be? B. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent? c. What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? d. suppose that fixed costs for the year are 10 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much? complete this question by entering your…The Selling Division’s unit sales price is P20 and its unit variable cost is P10. Its capacity is 10,000 units. Fixed costs per unit are P4. Current outside sales is 7,500 units. What is the maximum transfer price that the Purchasing Division would be willing to accept if 4,000 units will be sold to the Purchasing Division? Assume that the Purchasing Division can buy the same from outside market at P18.50 and that a cost of P1 per unit will be saved from the transfer. _____________________5. The Selling Division’s unit sales price is P20 and its unit variable cost is P10. Its capacity is 10,000 units. Fixed costs per unit are P4. Current outside sales is 10,000 units. What is the maximum transfer price that the Purchasing Division would be willing to accept if 4,000 units will be sold to the Purchasing Division? Assume that the Purchasing Division can buy the same from outside market at P18.50. _____________________6. The Selling Division’s unit sales price is P19 and its unit variable…Mix Electronics purchases 2,400,000 units per year of a component with a purchase price of P50. The fixed cost is P15 per order, and the carrying cost is 30% of the purchase price.a. Calculate the EOQ.b. Calculate the EOQ if the order cost is zero. c. Calculate the EOQ if the order cost is P10 per order.d. What is the implication to the firm if there is a decrease in the order cost?
