because there is sufficient excess capacity. However, the distribution center at the warehouse is operating at full capacity and would need to add capacity If Dexter accepts the order, no fixed manufacturing activities will be affected Problem 14 (Special-Order Decision; Flexible and Committed Resources) Problem 14, page 323A- Dexter Company (Special Order). coting P1,000 for every 5,000 units to e packed and shipped. - Requirement: By how much will profit increase or decrease if the order is accepted? Dexter Company haş been approached by a new customer, with an offer purchase 1,400 units of Dexter's product at a price of P3 each. The p customer is graphically separated from Dexter's other customers, and there would be no effect on existing sales. Dexter normally produces 10,000 units but only plans to produce and sell 8,000 in the coming year. The normal sales price is P5 per unit. Unit cost information is as follows: Direct materials Direct labor Variable overhead Fixed overhead Total PO.75 0.80 0.40 2.00 P3.95 e

because there is sufficient excess capacity. However, the distribution center at the warehouse is operating at full capacity and would need to add capacity If Dexter accepts the order, no fixed manufacturing activities will be affected Problem 14 (Special-Order Decision; Flexible and Committed Resources) Problem 14, page 323A- Dexter Company (Special Order). coting P1,000 for every 5,000 units to e packed and shipped. - Requirement: By how much will profit increase or decrease if the order is accepted? Dexter Company haş been approached by a new customer, with an offer purchase 1,400 units of Dexter's product at a price of P3 each. The p customer is graphically separated from Dexter's other customers, and there would be no effect on existing sales. Dexter normally produces 10,000 units but only plans to produce and sell 8,000 in the coming year. The normal sales price is P5 per unit. Unit cost information is as follows: Direct materials Direct labor Variable overhead Fixed overhead Total PO.75 0.80 0.40 2.00 P3.95 e

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter11: Linear Optimization Models

Section: Chapter Questions

Problem 10P: The management of Hartman Company is trying to determine the amount of each of two products to...

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The management of Hartman Company is trying to determine the amount of each of two products to produce over the coming planning period. The following information concerns labor availability, labor utilization, and product profitability: a. Develop a linear programming model of the Hartman Company problem. Solve the model to determine the optimal production quantities of products 1 and 2. b. In computing the profit contribution per unit, management does not deduct labor costs because they are considered fixed for the upcoming planning period. However, suppose that overtime can be scheduled in some of the departments. Which departments would you recommend scheduling for overtime? How much would you be willing to pay per hour of overtime in each department? c. Suppose that 10, 6, and 8 hours of overtime may be scheduled in departments A, B, and C, respectively. The cost per hour of overtime is 18 in department A, 22.50 in department B, and 12 in department C. Formulate a linear programming model that can be used to determine the optimal production quantities if overtime is made available. What are the optimal production quantities, and what is the revised total contribution to profit? How much overtime do you recommend using in each department? What is the increase in the total contribution to profit if overtime is used?
An automated turning machine is the current constraint at Jordison Corporation. Three products use this constrained resource. Data concerning those products appear below: LN RQ Selling price per unit Variable cost per unit $ 166.99 $ 116.03 JQ $ 364.43 $ 269.93 $ 431.06 $ 278.42 Minutes on the constraint 2.60 5.40 9.60 Rank the products in order of their current profitability from most profitable to least profitable. In other words, rank the products in the order in which they should be emphasized. (Round your intermediate calculations to 2 decimal places.)
An automated turning machine is the current constraint at Jordison Corporation. Three products use this constrained resource. Data concerning those products appear below: LN JQ $168.82 $313.84 $403.08 $139.72 $245.80 $287.56 RQ Selling price per unit Variable cost per unit Minutes on the constraint 1.50 4.20 7.60 Rank the products in order of their current profitability from most profitable to least profitable, In other words, rank the products in the order in which they should be emphasized. (Round your Intermedlate calculations to 2 declmoal places.) Multiple Cholce LN. JQ. RQ RQ. LN. JQ RQ. JQ. LN JQ. RQ LN Mc Graw Hill Type here to search 70°F Mostly cloudy 10 DELL
Use the following information for the next 2 questions (8 & 9). Division X produces and sells a product to external and internal customers. Per-unit information about its operations include: Selling price per unit to external customers $250 Variable manufacturing costs per unit 115 Fixed manufacturing overhead costs per unit 70 8. If X is operating at capacity and has unlimited external customer demand, what should be the minimum transfer price? 9. If X has sufficient excess capacity to meet internal demand, what should be the minimum transfer price?
packman company has a division that manufactures a component that sells for $72 and has variable costs of $29 and fixed costs of $18. another division wants to purchase the component. what is the minimum transfer price if the division is operating at capacity? a. $72 b. $29 c. $47 d. $18
1 Lazy Days Inc. (LDI), sells hammocks. Revenue and cost information is given below: Sales Price 3. TL 30 Unit Variable Cost 20 Annual Fixed Operating Expenses 47,500 Required: a) Determine the sales volume in units and TL amount that would be required to attain a TL 12,500 profit. Verify your answer by preparing an income statement using the contribution margin format. b) LDI is considering the implementation of a quality improvement program. The program will require a TL 2.50 increase in the variable cost per unit. To inform its customers of the quality improvements, the company plans to spend an additional TL 5,000 for advertising. Assuming that the improvement program will increase sales to a level that is 1,500 units above the amount computed in requirement a, should LDI proceed with plans to improve product quality? Support your answer by preparing a budgeted income statement. c) Determine the new break-even point volume of units and sales in TL as well as the margin of safety…
Sandpiper Inc. has a division that manufactures a component that sells for $165 and has a variable cost of $45. Another division of the company wants to purchase the component Fixed cost per unit of the component is $20. What is the minimum transfer price if the division is operating at capacity? OA. $165 OB. $45 OC. $20 OD. $65
3. Snapper Tool Company has plenty of excess capacity to accept a special order. Shown below is an "what-if" analysis of the special order. Which of the following is the correct decision and reason? Status Quo With Special Order Sales $128,000 $133,000 variable costs: Manufacturing 51,200 54,400 Selling and administrative 25,600 26,600 Contribution margin $51,200 $52,000 Fixed cost 19,200 19,200 Operating profit $32,000 $32,800 A) Yes, since the goal is to fill capacity as much as possible to keep fixed overhead variances as low as possible. B) No, the company will only break even. C) No, since only the employees will benefit from this in that they will earn more overtime. D) Yes, since operating profits will most likely increase.
Bertucci Corporation makes three products that use the current constraint which is a particular type of machine. Data concerning those products appear below: TC GL NG Selling price per unit $ 494.40 $ 449.43 $ 469.68 Variable cost per unit $ 395.20 $ 320.21 $ 373.92 Minutes on the constraint 8.00 7.10 7.60 Assume that sufficient constraint time is available to satisfy demand for all but the least profitable product. Up to how much should the company be willing to pay to acquire more of the constrained resource? (Round your intermediate calculations to 2 decimal places.)
G) Sales Mix Analysis. The C.E.O then indicates his concern as to which products should be sold to at least achieve a break even status. You suggest that the Sales Mix Analysis technique be used to provide the answer to this problem. In this regard you extract the following information from the records of the company: Product Contribution Margin Sales Mix % Wool Cotton $100 $150 65% 35% Fixed Costs are $ 1,175,000 You are then required to: 1) Explain the term "Contribution Margin" and show its usefulness in determining product sales mix. 2) Compute the Break Even Point in Units for the company 3) Compute the quantity of each product required to be sold to achieve the Break Even target.
TB MC Qu. 15-29 (Algo) Division B has varlable manufacturing... Division B has variable manufacturing costs of $59 per unit and fixed costs of $15 per unit. Assuming that Division B is operating significantly below capacity, what is the opportunity cost of an internal transfer when the market price is $84?
Sandhill Bikes could sell its bicycles to retailers either assembled or unassembled. The cost of an unassembled bike is as follows. Direct materials $147 Direct labor 70 Variable overhead (70% of direct labor) 49 Fixed overhead (30% of direct labor) 21 Manufacturing cost per unit $287 The unassembled bikes are sold to retailers at $451 each. Sandhill has unused productive capacity that is expected to continue indefinitely: management has concluded that some of this capacity could be used to assemble the bikes and sell them at $491 each. Assembling the bikes will increase direct materials by $5 per bike and direct labor by $10 per bike. Additional variable overhead will be incurred at the normal rates, but there will be no additional fixed overhead as a result of assembling the bikes.