Fairview Hospitals has three divisions (service lines). They are General Clinics, Specialty Clinics and Pharmacy Services. The s
ales for each service line were $1,400,000 General Data, $600,000 Specialty Clinics, and $420,000 Pharmacy Services while the variable expenses for each service line (division) were $520,000, $360,000 and $280,000 respectively. The related service line (division) discretionary and committed fixed expenses are presented below: Fixed expense General Clinics Specialty Clinics Pharmacy Services Discretionary $320,000 $140,000 $160,000 Committed $190,000 $280,000 $130,000 Calculate the net income of each division and the business in total
a. a schedule of requirements for all parts and end items
Explanation:
Material requisition planning (MRP) refers to a computer-based information system mainly meant to deal with ordering and scheduling of inventory items that are dependent on demand. It is provides a schedule of all parts, materials and other end inventory items that are required in a production process.
Therefore, the output of MRP is a schedule of requirements for all parts and end items.
If the production volume increases, the fixed cost per unit is decreases as it reflect an inverse relationship between the fixed cost per unit and the production volume
Let us take an example
Fixed cost = $20,000
Production volume = 100,000
Decrease in production volume = 80,000
So, the fixed cost per unit in the first case is
= 20,000 ÷ $100,000
= $0.2
And, the fixed cost per unit in the second case is
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