Supreme Furniture needs to purchase glass panes to make glass top coffee tables. Last year Supreme Furniture has two suppliers, Bobux and Twinkle, with the following supplier related information: Cost per unit of Number of activities Number of activities activity driver for Bobux Supplier related activities Returning poor quality glass panes $120 per pane 25 panes Processing purchase orders Receiving and inspecting deliveries $50 per delivery 15 deliveries Supplier audit Rework due to poor quality glass $100 per table 60 tables Purchase price per glass pane Number of glass panes purchased for Twinkle 12 panes 40 orders 15 deliveries 2 audits 15 tables $150 780 $20 per order 12 orders $1000 per audit 5 audits $100 446 Calculate the supplier performance index of Bobux (round your answer to 2 decimal places). Answer.

Supreme Furniture needs to purchase glass panes to make glass top coffee tables. Last year Supreme Furniture has two suppliers, Bobux and Twinkle, with the following supplier related information: Cost per unit of Number of activities Number of activities activity driver for Bobux Supplier related activities Returning poor quality glass panes $120 per pane 25 panes Processing purchase orders Receiving and inspecting deliveries $50 per delivery 15 deliveries Supplier audit Rework due to poor quality glass $100 per table 60 tables Purchase price per glass pane Number of glass panes purchased for Twinkle 12 panes 40 orders 15 deliveries 2 audits 15 tables $150 780 $20 per order 12 orders $1000 per audit 5 audits $100 446 Calculate the supplier performance index of Bobux (round your answer to 2 decimal places). Answer.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 2CE: Kaune Food Products Company manufactures canned mixed nuts with an average manufacturing cost of 52...

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Kaune Food Products Company manufactures canned mixed nuts with an average manufacturing cost of 52 per case (a case contains 24 cans of nuts). Kaune sold 150,000 cases last year to the following three classes of customer: The supermarkets require special labeling on each can costing 0.04 per can. They order through electronic data interchange (EDI), which costs Kaune about 61,000 annually in operating expenses and depreciation. Kaune delivers the nuts to the stores and stocks them on the shelves. This distribution costs 45,000 per year. The small grocers order in smaller lots that require special picking and packing in the factory; the special handling adds 25 to the cost of each case sold. Sales commissions to the independent jobbers who sell Kaune products to the grocers average 8 percent of sales. Bad debts expense amounts to 9 percent of sales. Convenience stores also require special handling that costs 30 per case. In addition, Kaune is required to co-pay advertising costs with the convenience stores at a cost of 15,000 per year. Frequent stops are made to each convenience store by Kaune delivery trucks at a cost of 30,000 per year. Required: 1. Calculate the total cost per case for each of the three customer classes. (Round unit costs to four significant digits.) 2. Using the costs from Requirement 1, calculate the profit per case per customer class. Does the cost analysis support the charging of different prices? Why or why not? 3. What if Kaune charged the average price per case to all customer classes? How would that affect the profit percentages?
The Port Authority sells a wide variety of cables and adapters for electronic equipment online. Last year the mean value of orders placed with the Port Authority was 47.28, and management wants to assess whether the mean value of orders placed to date this year is the same as last year. The values of a sample of 49,896 orders placed this year are collected and recorded in the tile PortAuthority. a. Formulate hypotheses that can be used to test whether the mean value of orders placed this year differs from the mean value of orders placed last year. b. Use the data in the file PortAuthority to conduct your hypothesis test. What is the p value for your hypothesis test? At = 0.01, what is your conclusion?
Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the economic order quantity. 2. Compute the ordering, carrying, and total costs for the EOQ. 3. How much money does using the EOQ policy save the company over the policy of purchasing 4,000 plastic housing units per order?
Bigdog Company distributes pet products. Its ABC system has five activities: Activity Area Cost Driver Rate in 2020 1. Order processing $50 per order 2. Line-item ordering $5 per line item 3. Store deliveries $40 per store delivery 4. Carton deliveries $6 per carton 5. Shelf-stocking $19 per stocking hour Rufus McBrain, the controller of Bigdog Company, wants to use this ABC system to examine customer profitability. He focuses on two of his customers to find out the insights he can gain from using this system. Data for these two customers in April 2020 are as follows: Pet Store Annerley RSPCA store Springwood Total orders 13 7 Average line items per order 11 19 Total store deliveries 5 7 Average cartons shipped per store delivery 21 18 Average hours of shelf stocking per store delivery 0.5 0.75 Average revenue per delivery $2,600 $1,900 Average cost of goods sold per delivery…
The Eastwood Cake Factory sells chocolate cakes, birthday decorated cakes, and specialty cakes. The factory is experiencing a bottleneck and is trying to determine which cake is more profitable. Even though the company may have to limit the orders that it takes, Eastwood is concerned about customer service and satisfaction. Chocolate Birthday Specialty Cake Cake Cake Sales price $20.00 $45.00 SE0.00 Variable cost per cake $5.00 $12.00 $20.00 Hours needed to bake, frast, and decorate 1 hour 2.5 hours 2 haurs Determine which cake the company should concentrate on producing first and then second and finally third. Select one: a. Birthcay, Chocolate, Specialty Ob. Specialty, Birthday, Chacolate c. Chocalate, Birthday, Specialty Od. Specialty, Chocolate, Birthday
Bigdog Company distributes pet products. Its ABC system has five activities: Activity Area Cost Driver Rate in 2020 1. Order processing $50 per order 2. Line-item ordering $5 per line item 3. Store deliveries $40 per store delivery 4. Carton deliveries $6 per carton 5. Shelf-stocking $19 per stocking hour Rufus McBrain, the controller of Bigdog Company, wants to use this ABC system to examine customer profitability. He focuses on two of his customers to find out the insights he can gain from using this system. Data for these two customers in April 2020 are as follows: Pet Store Annerley RSPCA store Springwood Total orders 13 7 Average line items per order 11 19 Total store deliveries 5 7 Average cartons shipped per store delivery 21 18 Average hours of shelf stocking per store delivery 0.5 0.75 Average revenue per delivery $2,600 $1,900 Average cost of goods sold per delivery…
Jones Ice Cream Stand is operated by Mr. Jones and experiences different sales patterns throughout the year. To plan for the future, Mr. Jones wants to determine its cost behavior patterns. He has the following information available about the ice cream stand's operating costs and the number of soft serve cones served. Month April May June July August September Number of ice cream cones 2000 2,100 OA $800 OB $1000 OC. $4800 OD. $2000 2,125 4000 2,500 2,900 Total operating costs $1800 $1,975 $2,000 $2800 $2,175 $2,500 Using the high-low method, the fixed costs for a month are (Round intermediary calculations to the nearest cent. Use the "high" data month to calculate your final answer. Do not use the "low" month, as it will result in an approximation of the cost.)
TidyCar washes vehicles using a nohands approach. Business is good but Jonathan, the manager, has noticed that customers complain because there are streaks on their vehicles at pickup. TidyCar warrants that each vehicle will sparkle at delivery and charges $25 for each vehicle. TidyCar washes 100 vehicles each day and last month, 40% of them required a hand finish. Each hand wash costs $15. Jonathan believes the problem can be eliminated by a prewash (costing $2 per vehicle) and an equipment calibration at the start of each day, which will reduce the number of vehicles washed each day by 10, but will decrease the vehicles requiring a hand finish from 40% to 10%. Q. What nonfinancial and qualitative factors should TidyCar consider in deciding whether to implement the new design?
MAY I ASK FOR THE SOLUTIONS AND ANSWERS TO NOS. 19 - 21. THANK YOU! ABC Corporation resells one type of candle. It has 250 working days. Each day, it sells an average of 500 boxes but may sometimes sell a maximum of 600 boxes. The supplier takes an average of 5 days to deliver the order. During busier times, the supplier may take 7 days. Based on ABC’s records, ordering cost average P400 per order. Storage cost per box average P5 per year. There is also an opportunity cost of 1% per year for every peso invested in inventories. Each box of candles costs P450. If ABC would continue its current inventory management policy, it would keep 10,000 boxes as safety stock and order ten days worth of inventory. (A) Reorder Point 1. What should be the reorder point in boxes? 2. How much would the normal lead time usage be? 3. How much should ABC keep as safety stock? (B) Economic Order Quantity 4. What is the annual demand for the boxes of candles? 5. How much is the carrying cost of one box of…
PROBLEM. Please show your computations to receive full credit. Mariposa Manufacturing builds custom wooden cabinets. Mariposa Manufacturing has reported the following costs for the previous year. Assume no production inventories. Advertising $70,500 $34,000 $117,800 $63,000 $17,500 $76,000 $3,800 $40,700 $41,600 $22,900 $31,800 Cost of hardware (sides, handles, etc.) Cost of Wood Depreciation on Production Equipment Factory Property Taxes Factory Rent Glue Production Supervisor Salary Sales Manager Salary Utilities for Factory Wages for Maintenance Workers Wages of Assembly Workers Wages of Finishing Workers $91,400 $77,800 Compute the following: i. Direct material costs ii. Direct labor cost iii. Manufacturing overhead iv. Total manufacturing cost v. Prime cost vi. Conversion cost vii. Total period cost Edit Format Table 12pt v Paragraph B IU A
Make or Buy Decision: Zee-Drive Ltd. is a computer manufacturer. One of the items they make is monitors. Zee-Drive has the opportunity to purchase 19,000 monitors from an outside supplier for $202 per unit. One of the company's cost-accounting interns prepared the following schedule of Zee-Drive's cost to produce 19,000 monitors: 19,000 monitors $ 2,185,000 1,292,000 684,000 551,000 798,000 $ 5,510,000 $290 You are asked to look over the intern's estimate before the information is shared with members of management who will decide to continue to make the monitors or buy them. The company's controller believes that the estimate may be incorrect because it includes costs that are not relevant. If Zee-Drive buys the monitors, the direct labor force currently employed in producing the monitors will be terminated and there would be no termination costs incurred. There are no materials on hand and no commitments to suppliers to purchase materials, so all materials would need to be purchased…
Mirabella Beauty manufactures and sells a face cream to small specialty stores in the greater Los Angeles area. It presents the monthly operating income statement shown here to George Lupe, a potential investor in the business. Help Mr. Lupe understand Mirabella Beauty's cost structure. Mirabella Beauty Operating Income Statement, June 2020 Units sold $10,000 Revenues $200,000 Cost of goods sold Variable manufacturing costs $70,000 Fixed manufacturing costs $32,900 Total 102,900 Gross margin 97,100 Operating costs Variable marketing costs $58,000 Fixed marketing and administrative costs 17,500 Total operating costs 75,500 Operating income $21,600 Recast the income statement to emphasize contribution margin. Calculate the contribution margin percentage and breakeven point in units and revenues for June2020. What is the margin of safety (in units) for June 2020? If sales in June were only 8,500 units and Mirabella's tax rate is 30%, calculate its net income.