REQUIRED a. What was the annual salary cost of the live agents prior to benchmarking? b. What is the annual salary cost of the live agents after benchmarking? What is the cost savings in one year? Salary cost of the live agents after benchmarking s Cost savings in one year c. To determine the success (or failure) of the benchmarking process, what other financial and nonfinancial items would you consider? Classify each consideration as financial or nonfinancial = " 1. Over how many years would the company realize the cost savings? 2. How does the increase in chatbot usage affect customer satisfaction? 3. Did technology costs increase in order to improve the efficiencies of the chatbots? 4. What was the cost of the study? 5. What is the average time of resolution of the customer questions before and after the improvements?

REQUIRED a. What was the annual salary cost of the live agents prior to benchmarking? b. What is the annual salary cost of the live agents after benchmarking? What is the cost savings in one year? Salary cost of the live agents after benchmarking s Cost savings in one year c. To determine the success (or failure) of the benchmarking process, what other financial and nonfinancial items would you consider? Classify each consideration as financial or nonfinancial = " 1. Over how many years would the company realize the cost savings? 2. How does the increase in chatbot usage affect customer satisfaction? 3. Did technology costs increase in order to improve the efficiencies of the chatbots? 4. What was the cost of the study? 5. What is the average time of resolution of the customer questions before and after the improvements?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 2CE: Assume that at the beginning of 20x2, Cicleta trained the 2 assembly workers in a new approach that...

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Assume that at the beginning of 20x2, Cicleta trained the 2 assembly workers in a new approach that had the objective of increasing the efficiency of the assembly process. Cicleta also began moving toward a JIT purchasing and manufacturing system. When JIT is fully implemented, the demand for expediting is expected to be virtually eliminated. It is expected to take two to three years for full implementation. Assume that receiving cost is a step-fixed cost with steps of 1,500 orders. The other three activities employ resources that are acquired as used and needed. At the end of 20x2, the following results were reported for the four activities: Required: 1. Prepare a trend report that shows the non-value-added costs for each activity for 20x1 and 20x2 and the change in costs for the two periods. Discuss the reports implications. 2. Explain the role of activity reduction for receiving and for expediting. What is the expected value of SQ for each activity after JIT is fully implemented? 3. What if at the end of 20x2, the selling price of a competing product is reduced by 27 per unit? Assume that the firm produces and sells 20,000 units of its product and that its product is associated only with the four activities being considered. By virtue of the waste-reduction savings, can the competitors price reduction be matched without reducing the unit profit margin of the product that prevailed at the beginning of the year? If not, how much more waste reduction is needed to achieve this outcome? In this case, what price decision would you recommend?
Clone Computers assembles and packages personal computer systems from brand-name components. Its Home Office PC System is assembled from components costing $1400 per system and sells for $2000. Labour costs for assembly are $100 per system. This product line's share of overhead costs is $10,000 per month. a. How many Home Office systems must be sold each month to break even on this product line? b. What will be the profit or loss for a month in which 15 Home Office systems are sold?
Action Trainers provides a personalized training program that is popular with many companies. The munber of programs offered over the last five months, and the costs of offering these programn are as follos Jan Feb Mar April May Promams Offered 55 45 60 Costs Incuned $15,400 14,050 18,000 14,700 19,000 50 75 Usang the high low method, compute the 1ranable cost per program and the 2 total fixed cost per month Uing the least squares regressicen method compune the 3 vanable cout pe program and the 4total fied cost per moeth
Make-or-Buy Decision, Alternatives, Relevant Costs Each year, Giada Company produces 14,000 units of a component part used in tablet computers. An outside supplier has offered to supply the part for $1.16. The unit cost is: Direct materials $0.73 Direct labor 0.28 Variable overhead 0.07 Fixed overhead 2.00 Total unit cost $3.08 Required: 1. What are the alternatives for Giada Company? 2. Assume that none of the fixed cost is avoidable. List the relevant cost(s) of internal production. List the relevant cost(s) of external purchase. 3. Which alternative is more cost effective and by how much? by $fill in the blank 5 4. What if $21,960 of fixed overhead is rental of equipment used only in production of the component that can be avoided if the component is purchased? Which alternative is more cost effective and by how much? by $fill in the blank 7
Sisters, Inc. manufactures professional-level printers that perform multiple features, such as high-resolution color scanning, printing, faxing, and copying. The new printer model has a target price of $600. Management requires a 20% profit on new product revenues. Required: 1. Calculate the amount of desired profit.$fill in the blank 1 2. Calculate the target cost.$fill in the blank 2
Alpena Corporation manufactures smartphone and tablet cases. The following is the cost of each unit. $ 7.80 3.40 1.40 10.80 $23.40 Materials Labor Variable overhead Fixed overhead ($1,620,000 per year; 150,000 units per year) Total Decatur Devices has approached Alpena with an offer to buy 3,000 cases at a price of $18.70 each for its new specialty tablet designed for health care workers. The regular price of an Alpena case is $31.00. Alpena has the total capacity to produce 180,000 units without increasing its fixed overhead. Decatur Devices requires that each case use its branding, which requires a more expensive embossing step. This will result in an additional $3.30 per case labor cost. The material cost of of the Decatur case will be the same as for the current models. The Decatur order will also require a one-time rental of embossing equipment for $4,704. Required: a. Prepare a schedule to show the impact of filling the Decatur Devices order on Alpena's profits for the year. b.…
Can you please answer this problem? Thanks The company Color World manufactures three products that require the use of a special machine. There are only 20,000 machine hours available per month. Product information: Product A Product B Product C Sales price per unit $ 1,200.00 $ 1,600.00 $ 2,100.00 Variable costs per unit $ 700.00 $ 800.00 $ 1,000.00 Contribution margin per unit $ 500.00 $ 800.00 $ 1,100.00 Machine Time required (hours) 10/unit 20/unit 25/unit Estimated demand in units (per month) 500 1000 400 a) If all products require the same amount of machine-time and you can sell any amount of any product, which one should be manufactured to maximize profits? b) With the estimated demand, the machine-time restriction and the time required for each product, determine the optimal composition that should be sold of each of them, in units, to maximize profits.
Life-Cycle Cost Management and Target Costing Nico Parts, Inc., produces electronic products with short life cycles (of less than two years). Development has to be rapid, and the profitability of the products is tied strongly to the ability to find designs that will keep production and logistics costs low. Recently, management has also decided that post-purchase costs are important in design decisions. Last month, a proposal for a new product was presented to management. The total market was projected at 220,000 units (for the two-year period). The proposed selling price was $145 per unit. At this price, market share was expected to be 25 percent. The manufacturing and logistics costs were estimated to be $136 per unit. Upon reviewing the projected figures, Brian Metcalf, president of Nico, called in his chief design engineer, Mark Williams, and his marketing manager, Cathy McCourt. The following conversation was recorded: BRIAN: Mark, as you know, we agreed that a profit of $13 per…
Life-Cycle Cost Management and Target Costing Nico Parts, Inc., produces electronic products with short life cycles (of less than two years). Development has to be rapid, and the profitability of the products is tied strongly to the ability to find designs that will keep production and logistics costs low. Recently, management has also decided that post-purchase costs are important in design decisions. Last month, a proposal for a new product was presented to management. The total market was projected at 220,000 units (for the two-year period). The proposed selling price was $145 per unit. At this price, market share was expected to be 25 percent. The manufacturing and logistics costs were estimated to be $136 per unit. Upon reviewing the projected figures, Brian Metcalf, president of Nico, called in his chief design engineer, Mark Williams, and his marketing manager, Cathy McCourt. The following conversation was recorded: BRIAN: Mark, as you know, we agreed that a profit of $13 per…
produces cell phone covers for all makes and models of cell phones. Cell Design sells 1,050,000 units each year at a price of $10 per unit and a contribution margin of 40%. LOADING... (Click the icon for additional information.) The current costs of quality are as follows: LOADING... (Click the icon to view the costs.) The QC manager and controller have forecast the following additional costs to modify the production process: LOADING... (Click the icon to view the additional costs.) Requirement If the improvements result in a 60% decrease in product replacement cost and a 70% decrease in customer returns, what is the impact on the overall COQ and the company's operating income? What should Cell Design do? Explain. What is the impact on the overall COQ and the company's operating income? (Use parentheses or a minus sign for a net cost.) Amount Benefits of quality improvements $409,500 Cost of making quality improvements…
Chandler Packaged Treats (CPT) sells a specialty pet food to pet stores. CPT management prides itself on its scientific management methods. Applying those methods, the controller estimates the following monthly costs based on 10,000 units (produced and sold): Direct material Direct labor Manufacturing overhead Selling, general, and administrative Total Required: a. Compute CPT's unit selling price that will yield a profit of $200,000, given sales of 10,000 units. b. What dollar sales does CPT need to achieve to generate a 15 percent profit on sales, assuming variable costs per unit are 55 percent of the selling price per unit and fixed costs are $188,100. c. Management believes that a selling price of $100.00 per unit is reasonable given current market conditions. How many units must CPT sell to generate the revenues (dollar sales) determined in requirement (b)? Total Annual Costs (10,000 units) $ 128,000 60,000 132,000 100,000 $ 420,000 Complete this question by entering your answers…
Lazer Tag manufactures computer parts within a relevant range of 50,000 to 100,000 units per year. Complete the following manufacturing cost schedule (a through j) for Lazer Tag. Fill in the following chart. Parts Produced 50,000 100,000 TOTAL COSTS: Variable $75,000 ? Fixed 50,000 ? Total ? ? COSTS PER UNIT: Variable ? ? Fixed ? ? Total ? ?