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kumpel [21]
3 years ago
11

Drew's company. Ace High sells customized sets of poker chips. he is developing a plan for next year on a quarterly basis. the e

xpected demand is 600 700 600 and 700 set of chips, respectively for quarters one through four. he currently has 50 sets on hand that can be used to meet next year's demand. he can produce 150 units per month (or 450 per quarter) at the regular rate of $50 per set. His team will work overtime when needed and available. producing up to 300 units in Q1, 150 in Q2. none in Q3 and 200 in Q4. Sets produced via overtime cost a total of $75 per set. he can leverage a competitor firm and outsource production at the cost of $85 per set with a capacity of 300 units per quarter. Storage costs are $7 per set per quarter. Drew has determined that he cannot have lost sales. and that backlogging is not allowed. What is the optimal cost for Drew? Base on the optimal solution: How many total units would be produced via regular time? How many total units would be produced via overtime? How many units would be produced via subcontracting? How many units of excess capacity are there?
Business
1 answer:
Furkat [3]3 years ago
8 0

Answer:

a) it will first use overtime production and then, subcontract competitor

b) It will produce 650 units during overtime

c) it will purchase 100 units via subcontracting

d) considering the outsource production, the company could be able to produce and sale 1,100 extra units As the subcontractor can produce up to 300 sets per uarter giving a capacity of 1,200 per year and we only use 100 sets.

Explanation:

The company will operate at full capacity thus, producing 450 per uqarter now we need to check if it is better to do overtime or to outsource:

$50 cost of set produced in overtime.

storage cost $7

Total: $57 dollars

outsource $85

<em>It is better to produce and store rather than outsource.</em>

Q1 600- 450 = 150 units

The company will produce his <em>overtime of 300 units</em>

150 - 300 =<em> 150 set are stored to next quarter.</em>

Q2 700 - 450 = 350 units

350 units - 150 stored - <em>150 overtime</em> = <em>50 outsource</em>

Q3 600 - 450 = 150 units

there is no store and no overtime available thus, all are <em>outstource</em>

Q4 700 - 450 = 250 units

250 - <em>200 overtime</em> = <em>50 outsource</em>

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Based on Destiny's preference for investments with the highest returns without consideration of their riskiness, he will most likely be interested in <em>A. junk bonds.</em>

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Thus, Destiny's interest will be in junk bonds because he does not mind the risks but wants the highest returns from his investments.

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6 0
2 years ago
Suppose that on January 6, 2018, Excel Motors paid $240,000,000 for its 45% investment in Dynamic Motors. Excel has significant
Ivenika [448]

Answer: provided in the explanation segment

Explanation:

To begin we will answer each part accordingly.

For Requirement 1 :  

I would say that Excel Motors should use the Equity method to account for its investment in Dynamic Motors, because the investment results in significant influence over the investment company.

For Requirement 2 :  

In the books of Excel Motors: we have that;

Transaction/ Event   Date Accounts&Explanation   Debit ($

)  Credit($

)

    1.     Jan 6, 2018   Investment in Associate 240,000,000    

                                                        Cash                            240,000,000

Accnt&Explan: To record cash paid for equity investment in Dynamic Motors.  

   

    2.              Cash ( $ 15,000,000 x 45%)      6,750,000  

                        Investment in Associate                         6,750,000

Accnt&Explan:To record dividend received in cash from Dynamic Motors  

   

3. Investment in Associate ( $ 10,000,000 x 45%) 4,500,000  

                                           Investment Revenue                        4,500,000

Accnt&Explan:To record income earned on equity investment

For Requirement 3:

 Equity Investment in Dynamic Motors:

               Cash      240,000,000           Cash                 6,750,000

Investment Income 4,500,000  

                                                                       Ending Balance 237,750,000

                                      244,500,000  244,500,000

The balance would be classified as a non-current asset on the balance sheet dated December 31, 2018

cheers i hope you understand, this is actually in a tabular form.

8 0
2 years ago
Describe a real or made up but realistic situation in which you would want to use revolving credit. (2-4 sentences)
Artist 52 [7]

Answer:

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6 0
2 years ago
What are five things you should consider when trying to decide if you should buy or lease a car?
Angelina_Jolie [31]
The price the model used or new if you have a leased car if you damage it you got to pay
4 0
3 years ago
Rivera Company has several processing departments. Costs charged to the Assembly Department for November 2020 totaled $2,288,076
Xelga [282]

Answer:

Using the FIFO cost method:

beginning WIP 34,600 units

materials $79,000 (100% complete)

conversion $48,200 (30% complete, 70% remaining = 24,220 EU)

units started 662,700

materials added $1,594,520

conversion costs added $566,356

ending WIP 24,100

100% complete for materials

40% complete for conversion = 9,640 EU

units completed and transferred out = 34,600 + 662,700 - 24,100 = 673,200

units started and completed = 662,700 - 34,600 - 24,100 = 604,000

total equivalent units for the month:

materials 662,700

conversion = 24,220 + 604,000 + 9,640 = 637,860

total cost per EU:

materials = $1,594,520 / 662,700 = $2.4061

conversion = $566,356 / 637,860 = $0.8879

total = $3.294

cost of ending WIP:

materials = 24,100 x $2.4061 = $57,987

conversion = 9,640 x $0.8879 = $8,559.36 ≈ $8,559

total = $66,546

cost of units transferred out = $79,000 + $48,200 + $1,594,520 + $566,356 - $66,546 = $2,221,530

total units transferred out = 673,200

production cost per unit = $2,221,530 / 673,200 = $3.30

3 0
3 years ago
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