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777dan777 [17]
2 years ago
15

You are asked to recommend whether a firm should make or purchase product A. The following are data concerning the two options.

For the purchase​ option, the firm can buy product A at ​$22 per unit. For the make​ option, the firm can produce product A based on the following cost estimation data. The firm has to pay a weekly rental payment of ​$30 comma 800 for the production facility. With the use of this​ facility, the firm also has to hire five operators to help make product A. Each operator works eight hours per​ day, five days per week at the rate of ​$14 per hour. In other​ words, the rental and labor expenses are fixed costs. The material cost for the make option is ​$15 per unit of product A. a. Find a weekly amount of product A that provides the breakeven point for the firm. The breakeven point in this problem indicates the​ firm's indifference between purchasing or making product A. b. If the firm estimates the sale of product A to be 6 comma 600 units per​ week, should it make or purchase product​ A?
Business
1 answer:
Alexxandr [17]2 years ago
3 0

Answer:

Instructions are listed below

Explanation:

Giving the following information:

For the purchase​ option:

Buying price= ​$22 per unit.

For the make​ option:

Weekly rental payment of ​$30,800

The firm also has to hire five operators to help make product A. Each operator works eight hours per​ day, five days per week at the rate of ​$14 per hour.

The material cost for the make option is ​$15 per unit of product A.

A) We need to find the number of units that makes the unitary fixed costs= $7

Weekly rental= 30800

Direct labor= ($14*8 hours*5workes)*5 days= 2800

Total fixed costs= $33,600

Unitary fixed costs= total fixed costs/ Q

7=33600/Q

Q= 4800 units

B) Now Q= 6600

Buy= 6600*22= $145,200

Make= 6600*15 + 33600= $132,600

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True or false: production runs can be scheduled in one or two shifts.
irina1246 [14]
The answers are as follows:
1. TRUE.
Shift schedule is a practice used in manufacturing industries to increase the numbers of hours that is used in production process. The shift divides the hours in the day into specific period and assign teams that will work during each period. The shift practice is usually employed in production run in order to ensure efficient use of all resources during the production process. Production run are typically schedule into one or two shifts; which may be during the day alone or during the day and night.
2. FALSE
Hiring the needed complement will eliminate OVERTIME, not the second shift. Hiring the needed complement usually remove the need for all overtime. Hiring the needed complement will make having a second production run team possible and this second team can handle the production process that ought to be done through overtime.
3. FALSE.
It is the duty of the management to strive to DECREASE STAFF TURNOVER.
Staff turnover refers to the rate at which employees are leaving a company and new employees are been absorbed. High staff turnover will make the company to spend more money on resources and training of new staffs.  
4. TRUE.
During periods of high demand, production usually increases and more workers are hired. Instead of hiring more workers, a company that has two production shifts may decide to add more workers to the first shift in order to increase the amount of work that could be done. This will result in the decrease in the number of the workers in the second shift.
5. FALSE
Increasing training hours decreases needed complement. Increasing the training hours will equip the workers with the needed knowledge which will make them more effective and productive. This will decreases the complement needed for the production process.
6. RECRUITING COST [B].
In a situation where a company has to hire more workers to the one it already has on ground as a result of increased production, then the company will have to spend extra money in the process of recruiting the needed workers.
7. DECREASE [B]
If the productive index is already at 100%, adding overtime will decreases the productivity index. This is because, overtime has a way of reducing the efficiency and the productivity of the workers, thus decreasing the amount of work done by them.
8. FALSE.
Workers training is entered in hours. The amount of training received by workers are measured in hours. The higher the training hours, the higher the amount of training which a worker has undergone and the higher will be the value of that worker to the company.
9. C
Each company is expected to have a base amount of $1,000 for each new worker that is hired. The company may decide to eliminate all other recruiting costs but this base amount can not be eliminated.
10. SEPARATION COST [C].
Separation cost are incurred when production level decreases and/ or automation level increases.
Separation cost refers to the cost that is needed to lay off an employee from an organisation. When the production level decreases or the company decide to automate their production processes, then some workers will have to be sacked and these workers have to be paid some money before they leave the company. This result in increase in the amount of money that the company will spend on separation cost.
8 0
3 years ago
Marpor Industries has no debt and expects to generate free cash flows of $16 million each year. Marpor believes that if it perma
tatyana61 [14]

Answer and Explanation:

The computation is shown below:

a.  Marpor's value without leverage is

But before that first we have to calculate the required rate of return which is

The Required rate of return = Risk Free rate of return + Beta × market risk premium

= 5% + 1.1 × (15% - 5%)

= 16%

Now without leverage is

= Free cash flows generates ÷ required rate of return

= $16,000,000 ÷ 16%

= $100,000,000

b. And, with the new leverage is

= (Free cash flows with debt ÷ required rate of return) + (Tax rate × increase of debt)

= ($15,000,000 ÷ 0.16) + (0.35 × $40,000,000)

= $93,750,000 + $14,000,000

= $107,750,000

5 0
3 years ago
What is a Job market​
Scrat [10]

Answer: The job market is the market where employers search for new employees and employees are searching for jobs.

Explanation:

8 0
3 years ago
Assume Mercy Hospital underestimated the provision for bad debts and contractual adjustments reported on its December 31, 2015 i
attashe74 [19]

Answer:

If the hospital underestimated its bad debt, that means that they are overestimating their profits. The cash flow is determined using the income statement, so it will also be overestimated. But at some point reality will catch up and the actual cash flow will be less than expected, since bad debts reduce actual revenue.

5 0
3 years ago
In 2022: Net sales are expected to increase by $9.70 million. Cost of goods sold is expected to be 60 percent of net sales. Depr
Anuta_ua [19.1K]

Answer:

The question is not complete.

Here is the complete question:

You have been given the following information for PattyCake’s Athletic Wear Corp. for the year 2021:

Net sales = $38,900,000.

Cost of goods sold = $22,220,000.

Other operating expenses = $6,400,000.

Addition to retained earnings = $1,210,500.

Dividends paid to preferred and common stockholders = $1,943,000.

Interest expense = $1,850,000.

The firm’s tax rate is 30 percent.

In 2022:

Net sales are expected to increase by $9.90 million.

Cost of goods sold is expected to be 60 percent of net sales.

Depreciation and other operating expenses are expected to be the same as in 2021.

Interest expense is expected to be $2,125,000.

The tax rate is expected to be 30 percent of EBT.

Dividends paid to preferred and common stockholders will not change.

Calculate the addition to retained earnings expected in 2022. (Enter your answer in dollars, not millions.)

Here is the answer:

Addition to retained earnings is $ 5,753,500

Explanation:

Addition to retained earnings is derived after deducting dividend paid to preferred and common stockholders from the earnings after tax of the entity.

In the case of PattyCake’s Athletic Wear Corp. , it is important to calculate earning after tax before deducting dividend to get addition to retained earnings:

Calculation of Earning after Tax

Earning after Tax is derived by deducting, cost of sales, operating expenses, interest and tax from the entity net sales.

Net Sales ( $38,900,000.  + $9,900,000)                        48,800,000

Cost of Sales (0.6  *    48,800,000)                                  (29,280,000)

Gross profit                                                                         19,520,000

Depreciation and other operating expenses                    (6,400,000)

Earning before Interest and Tax                                        13,120,000

Interest                                                                                 (2,125,000)

Earning before Tax                                                             10,995,000

Tax @ 30% EBT                                                                   (3,298,500)

Earning after Tax                                                                7,696,500

After this, dividend paid is removed to get addition to retained earnings

= $7,696,500  - $1,943,000

=$ 5,753,500

5 0
3 years ago
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