Riesemberg Medical Devices is allocating next year's budget among its divisions. As a result, the R&D Division needs to deter which R&D projects to fund. Each project requires various software and hardware and consulting expenses, along with internal esources. A budget allocation of $1,300,000 has been approved, and 35 engineers are available to work on the projects. The group has determined that at most one of projects 1 and 3 should be pursued, and that if project 4 is chosen, then project 3 mu e chosen. Develop a model to select the best projects within the budget. Click the icon to view the project expected return (NPV), resources, and cost data. Which combination of projects maximizes NPV within the budget? Select all that apply.

Riesemberg Medical Devices is allocating next year's budget among its divisions. As a result, the R&D Division needs to deter which R&D projects to fund. Each project requires various software and hardware and consulting expenses, along with internal esources. A budget allocation of $1,300,000 has been approved, and 35 engineers are available to work on the projects. The group has determined that at most one of projects 1 and 3 should be pursued, and that if project 4 is chosen, then project 3 mu e chosen. Develop a model to select the best projects within the budget. Click the icon to view the project expected return (NPV), resources, and cost data. Which combination of projects maximizes NPV within the budget? Select all that apply.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 38P: Friendly Bank is attempting to determine the cost behavior of its small business lending operations....

See similar textbooks

Similar questions

The Document Creation Center (DCC) for Arlington Corp. provides photocopying and document services for three departments in the Minneapolis office. The following budget has been prepared for the year. Available capacity 8,030,000 pages Budgeted usage: Software Development 1,630,000 pages Training 3,333,000 pages Management 2,127,000 pages Cost equation $310,000 + $0.02 per page If DCC uses a dual-rate for allocating its costs, how much cost will be allocated to the Management Department, assuming the Management Department actually made 2,130,000 copies during the year? Multiple Choice $84,670. $86,790. $86,275. $135,600.
The Document Creation Center (DCC) for Arlington Corp. provides photocopying and document services for three departments in the Minneapolis office. The following budget has been prepared for the year. Available capacity 8,000,000 pages Budgeted usage: Software Development 1,600,000 pages Training 3,000,000 pages Management 2,400,000 pages Cost equation $280,000 + $0.03 per page If DCC uses a dual-rate for allocating its costs, how much cost will be allocated to the Training Department, assuming the Training Department actually made 2,770,000 copies during the year? Multiple Choice $193,900. $203,100. $180,050. $190,079.
A local engineering firm is bidding on a design project for a new client. The total budgeted direct-labor costs for the firm are $600,000. The total budgeted indirect costs are $800,000. It is estimated that there are 10,000 billable hours in total. a. What is the budgeted direct-labor cost rate? b. What is the budgeted indirect-cost rate assuming direct-labor cost is the allocation base? c. What should be the engineering firm bid on the project if the direct labor hours are estimated at 300 hours?
The Document Creation Center (DCC) for Arlington Corp. provides photocopying and document services for three departments in the Minneapolis office. The following budget has been prepared for the year. Available capacity 8,100,000 pages Budgeted usage: Software Development 1,700,000 pages Training 3,100,000 pages Management 2,500,000 pages Cost equation $285,000 + $0.02 per page If DCC uses a dual-rate for allocating its costs based on usage, how much cost will be allocated to the Software Development Department? Multiple Choice $116,740. $100,370. $45,630. $162,000.
A local engineering firm is bidding on a design project for a new client. The total budgeted direct-labor costs for the firm are $400,000. The total budgeted indirect costs are $600,000. It is estimated that there are 8,000 billable hours in total. Required: What is the budgeted direct-labor cost rate? What is the budgeted indirect-cost rate assuming direct-labor cost is the allocation base? What should be the engineering firm bid on the project if the direct labor hours are estimated at 300 hours?
The Document Creation Center (DCC) for Arlington Corp. provides photocopying and document services for three departments in the Minneapolis office. The following budget has been prepared for the year. Available capacity 9,400,000 pages Budgeted usage: Software Development 2,460,000 pages Training 3,600,000 pages Management 2,940,000 pages Cost equation $307,000 + $0.06 per page If DCC uses a dual-rate for allocating its costs based on usage, how much cost will be allocated to the Management Department? Multiple Choice $247,887. $276,687. $256,878. $130,829.
SIS Technologies currently allocates insurance costs on the basis of direct labor hours. If the direct labor hours for departments A, B, and C are expected to be 3000, 9000, and 5000, respectively, this year, determine the allocation to each department based on an indirect cost budget of $34,000.
Create a budget for the following project: Blazer Company plans on purchasing new equipment to retool its manufacturing process. The project will involve the acquisition of equipment, installation of the new equipment, selling off the old equipment and training the workforce on the new equipment and processes. Blazer expects this project to take two years from beginning to end. Costs and expected income for the project are as shown below. Your task is to create a two-year cash budget for the project and compute a return on investment (ROI) for the project. You may ignore the time value of money in your calculation. You may make reasonable assumptions to complete this problem so long as you document them. Facts: a. The equipment to be purchased will cost $455,000. The equipment will be purchased and paid for at the beginning of Year 1. b. Installation cost will be $55,000. c. Blazer will purchase a maintenance contract for the equipment. The first year of maintenance is included in the…
Jay Rexford, president of Photo Artistry Company, was just concluding a budget meeting with his senior staff. It was November of 20x1, and the group was discussing preparation of the firm’s master budget for 20x2. “I've decided to go ahead and purchase the industrial robot we’ve been talking about. We’ll make the acquisition on January 2 of next year, and I expect it will take most of the year to train the personnel and reorganize the production process to take full advantage of the new equipment.” In response to a question about financing the acquisition, Rexford replied as follows: “The robot will cost $950,000. There will also be an additional $50,000 in ancillary equipment to be purchased. We’ll finance these purchases with a one‑year $1,000,000 loan from Shark Bank and Trust Company. I’ve negotiated a repayment schedule of four equal installments on the last day of each quarter. The interest rate will be 10 percent, and interest payments will be quarterly as well.” With…
Bowflex Corporation is organized as a decentralized company. The strength division is organized as a Cost Center and reports the following costs: Line Item Full Year Budget Full Year Actuals Production Line Wages $20,000 $30,000 Production Line Salaries 40,000 55,000 Property Depreciation 25,000 20,000 Overhead Costs 15,000 12,000 Prepare a brief Cost Center Budget Performance Report AND include what the first action you would take as a financial controller would be.
University of Tampa offers high-quality undergraduate-level programs. UT has two principal operating departments, College of Business and Sciences, and two support departments, Facility Services and Admissions. The base used to allocate facility services is budgeted total maintenance hours. The base used to allocate admissions costs is number of credit hours for a department. The Facility Services budget is $280,000, while Admissions budget is $450,000. Interdepartmental usage is as follows: Services Provided: (Annually) Facilities Admissions COB Sciences Facilities 0 1,500 3,500 5,000 (in hours) Admissions 1,000 0 15,000 9,000 (in credit hrs) (a) Use the Direct Method to allocate support department costs. The amount of Facilities support costs allocated…
University of Tampa offers high-quality undergraduate-level programs. UT has two principal operating departments, College of Business and Sciences, and two support departments, Facility Services and Admissions. The base used to allocate facility services is budgeted total maintenance hours. The base used to allocate admissions costs is number of credit hours for a department. The Facility Services budget is $280,000, while Admissions budget is $450,000. Interdepartmental usage is as follows: Services Provided: (Annually) Facilities Admissions Facilities 0 1,500 COB Sciences 3,500 5,000 (in hours) Admissions 1,000 0 15.000 9,000 (in credit hrs) Use the Reciprocal method to allocate support department costs. What amount of Admissions support costs will be allocated to COB?