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3 years ago

Michael's Machine Shop reports the following information for the quarter.

Business

1 answer:

Mandarinka [93]3 years ago

3 0

Answer:

a. $26

b. $23

c. $34

d. $29

e. $21

f. $11

g. $14

h. $11

Explanation:

a. Variable cost per unit.

Variable cost per unit = Variable Manufacturing Costs + Variable Non - Manufacturing Costs

= $12 + $9 + $2 + $3

= $26

b. Variable production cost per unit.

Variable production cost per unit = Variable Manufacturing Cost

= $12 + $9 + $2

= $23

c. Full cost per unit.

Full cost per unit = Manufacturing and Non - Manufacturing (Variable and Fixed)

= $12 + $9 + $2 + $3 + $47,500/23,750 units + $142,500/23,750 units

= $12 + $9 + $2 + $3 + $2 + $6

= $34

d. Full absorption cost per unit.

Full absorption cost per unit = Variable Manufacturing Costs + Fixed Manufacturing Costs

= $12 + $9 + $2 + $6

= $29

e. Prime cost per unit.

Prime cost per unit = Direct Manufacturing Costs'

= $12 + $ 9

= $ 21

f. Conversion cost per unit.

Conversion cost per unit = Direct Labor Costs + Overheads Costs

= $9 + $2

= $11

g. Contribution margin per unit.

Contribution margin per unit = Sales - Variable Costs

= $ 40 - $26

= $ 14

h. Gross margin per unit.

Gross margin per unit = Sales - Full absorption cost per unit

= $40 - $29

= $11

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Bell Computers purchases integrated chips at â€‹$350 per chip. The holding cost is â€‹$35 per unit perâ€‹ year, the ordering cos

valentina_108 [34]

Answer:

<h3><u>When holding costs are $35 per unit</u>,</h3>

1.The most cost-effective order quantity (assuming they take the most cost-effective discount, and use a fixed holding cost) is <u>182 units</u>.

2. At the chosen level of quantity, discount, and using the fixed holding cost, the total annual cost for Bell computers to order, purchase, and hold the integrated chips is <u>$1,585,898</u>.

<h3><u>When holding costs are 10% of purchase price per unit,</u></h3>

1.The most cost-effective order quantity (assuming they take the most cost-effective discount, and use a fixed holding cost) is <u>189 units</u>.

<h3>When holding costs are $35 per unit,</h3>

We follow these steps to arrive at the answer:

1. We have

Ordering Costs per order $119

Holding Cost per unit $35

Demand per month 405 units

Demand per year is $405*12 = 4860 units$

Since the most cost-effective order quantity is the Economic Order Quantity (EOQ), we compute the EOQ

$\mathbf{EOQ = \sqrt{\frac{2SD}{H}}}$

where

D is demand per year

S is the Ordering cost per order

H is the holding cost per unit

Substituting the values we get,

$EOQ = \sqrt{\frac{2*(405*12)*119}{35}}$

$EOQ = \sqrt{33048}$

$\mathbf{EOQ = 181.7910889 \approx 182 units}$

2. The annual costs of ordering, purchasing and holding the integrated chips is the sum of the cost of ordering, purchasing and holding the integrated chips.

Since the EOQ at 182 units falls in the second slab of Rich Blue Manufacturing, Bell computer can purchase chips at $325 per unit

Cost of purchasing the chips $\mathbf{405*12*325 = 1579500}$

Number of orders to placed $\frac{Annual Demand}{EOQ}$

Number of orders to placed $\frac{405*12}{182}$

Number of orders to placed $\mathbf{26.703 \approx 27 orders}$

Cost of orders $Number of orders * Cost per order$

Cost of orders $\mathbf{27 * 119 = 3213
}$

Holding Costs $\frac{EOQ}{2} * Holding cost per unit$

Holding Costs $\frac{182}{2} * 35$

Holding Costs $\mathbf{3185
}$

Total annual costs $\mathbf{1579500 + 3213 + 3185 = 1585898}$

<h3>When holding costs are 10% of purchase price per unit,</h3>

1. We need to calculate the EOQ, which holding cost at each purchase price

$EOQ_{350} = (2*(405*12)*119)/(350*0.10) \approx 182 units$

$\mathbf{EOQ_{325} = (2*(405*12)*119)/(325*0.10)\approx 189 units}$

$EOQ_{300} = (2*(405*12)*119)/(300*0.10)\approx 197 units$

Since the EOQ lies between 100 and 199 units in all the three costs, Bell Computers can purchase the units only at $325 per unit, so its holding cost will be 10% of $325, which is $32.50 per unit.

2.2. The annual costs of ordering, purchasing and holding the integrated chips is the sum of the cost of ordering, purchasing and holding the integrated chips.

Since the EOQ at 189 units falls in the second slab of Rich Blue Manufacturing, Bell computer can purchase chips at $325 per unit

Cost of purchasing the chips $\mathbf{405*12*325 = 1579500}$

Number of orders to placed $\frac{Annual Demand}{EOQ}$

Number of orders to placed $\frac{405*12}{189}$

Number of orders to placed $\mathbf{24.762 \approx 25 orders}$

Cost of orders $Number of orders * Cost per order$

Cost of orders $\mathbf{25 * 119 = 2975 }$

Holding Costs $\frac{EOQ}{2} * Holding cost per unit$

Holding Costs $\frac{189}{2} * 32.5$

Holding Costs $\mathbf{3071.25
}$

Total annual costs $\mathbf{1579500 + 2975 + 3071.25 = 1585546.25
}$

7 0

2 years ago

In todayâs workplace, teams are a vital force, and the majority of business professionals must collaborate on the job. The trend

Sphinxa [80]

Answer:

c) response more quickly

Explanation:

Teamwork refers to working in collaboration towards attainment of a common goal. Teamwork leads to synergistic gains as the collective group work exceeds the work carried out individually.

Following points highlight the importance of team work in an organization:

Promotes problem solving skills: Working in a team helps individual develop problem solving skills.
Improved coordination and communication: Teamwork leads to better familiarity and thus improves coordination.
Increased efficiency and quicker responses: Teamwork leads to synergistic gains as collective effort exceeds individual effort and also expeditious performance.
Promotes learning: One to many interactions among team members promotes learning
Builds a sense of belonging: Since all team members are united by one common goal, teamwork builds a sense of belonging w.r.t organization.

5 0

3 years ago

A TV manufacturing company uses speakers at the rate of 8000/mo. When it places an order for speakers it incurs a fixed cost of

sveticcg [70]

Solution :

1. Ordering quantity 500 1000 10000 30000 80000

2. No. of orders 16 8 0.8 0.27 0.1

3. Average inventory 250 500 5000 15000 40000

4. Value of average 2750 5250 50000 142500 370000

inventory

5. Monthly total cost

a). Cost of material 88000 84000 80000 760000 740000

b). Ordering cost 19200 9600 960 320 120

c). Carrying cost 27.5 52.5 500 1425 3700

Total monthly cost 107227.5 93652.5 81460 77745 77820

Among the total monthly cost, $ 77,745 is the least cost.

Therefore, the optimum order size of quantity = 30,000

The number of orders per month = 8000/30000 = 0.267

Time between two consecutive orders = 30000/8000 = 3.75 months

7 0

3 years ago

Pursuant to plan of reorganization adopted in the curren year, newman corporation exchanged property with an adjusted basis of 8

Alenkinab [10]

Answer:

Explanation:

Victor's recognized gain equals to zero, because this exchange qualifies under Sec. 368 as a tax-free reorganization.

4 0

2 years ago

The narrowest definition of the money supply (M1) includes:

fenix001 [56]

Answer:

c. cash, checking account balances, and travelers' checks.

Explanation:

Money Supply is the concept that means the amount of the liquid financial products and total currency in the market or economy. It is regulated the macro-economically by the monetary policy. So, there are types of measures of money supply or stock:

-M0: narrowly, it means the hard currency in circulation

-MB: it equals M0+ the hard currency which are not technically in circulation and in bank reserves.

-M1: it is the most common one and equals M0 plus checking accounts plus travelers’ checks and other checkable deposits.

-M2: covers M1 and saving accounts and CDs.

-M3: it surrounds the larger deposits.

-MZM: finally, this indicates the money market deposits.

That’s why we could notice that M1 narrowly means the cash, checking account and travelers’ checks.

5 0

3 years ago