b. XYZ company produces staplers and other items. The production cost per unit is $8 and the cost of setting up the production line for this is $60. The annual holding cost rate is 30%. The company works 250 days per year. The production rate for this product is 120 per day. If the annual demand is 20,000 units, iii. What is the total production time allocated to this product annually?

b. XYZ company produces staplers and other items. The production cost per unit is $8 and the cost of setting up the production line for this is $60. The annual holding cost rate is 30%. The company works 250 days per year. The production rate for this product is 120 per day. If the annual demand is 20,000 units, iii. What is the total production time allocated to this product annually?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 5EB: Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90....

See similar textbooks

Similar questions

Nestle Ltd. produces its premium plant food in 50 Kg bags. Demand is 100,000 Kgs. per week and the plant operates 52 weeks each year. Nestle can produce 250,000 Kgs. per week. The setup cost is OMR 200 and the annual holding cost rate is OMR 0.550 per bag. What is the optimal total cycle time including the production time in year?
The fixed costs within a machine shop are $3.4M annually. The main product this shop produces is priced at $15.00 per unit. Costs for material and labor are $6.50 per unit. What is the annual profit (or loss) if 300,000 units are sold?
solve i, ii and iii please. Suppose the demand of a product produced by a production firm is 8000 per year (1 year = 312 days) and it occurs at a constant rate. The production rate of the product per year is 10000. The set up cost of setting a machine for the production of the product is 600 Taka. The selling price per unit of the product is 1000 Taka. The inventory holding cost per unit per year is calculated as 5% of the selling price per unit. Assuming selling of the product starts from the outset of production and there is no occurrence of shortages of the product, b) Let the cost of inspection is given by 30Q, where $30 is the cost per unit of inspection and the cost of passing defectives is estimated as 12000/Q. i. Find the optimal amount of inspection that minimizes the associated total cost. ii. Find the associated minimal total cost. iii.Find the total costs at Q = 16 and Q = 24 and highlight their relationship with the cost of optimal quantity of inspection.
The Rolling Creek Textile Mill produces denim. The fixed monthly cost is $21,000, and the variable cost per yard of denim is $0.45. The mill sells a yard of denim for $1.30. a. For a monthly volume of 18,000 yards of denim, determine the total cost, total revenue and profit. b. Determine the annual break-even volume for the Rolling Creek Textile Mill. c. If the maximum operating capacity of the Rolling Creek Textile Mill described in Problem 1 is 25,000 yards of denim per month, determine the break-even volume as a percentage of capacity. ||
Your Company produces 1,000 parts per year, which are used in the assembly of one of its products. The unit product cost of these parts is: Variable manufacturing costs $12.00 Fixed manufacturing costs $9.00 Total per unit product cost $21.00 The part can be purchased from an outside supplier at $20 per unit. If the part is purchased from the outside supplier, two thirds of the fixed manufacturing costs can be eliminated. The annual impact on the company's net operating income as a result of buying the part from the outside supplier would be: a. $1,000 increase b. $1,000 decrease c. $5,000 increase d. $2,000 decrease
ETS manufactures a component for its computer products. The annual demand for thiscomponent is 2500 units. The annual cost of maintaining inventory is10% per unit and the cost of preparing an order and setting up productionfor the order is $ 50.The machine used to make this part has a production rate of 10,000units per year and the cost is $ 22 per unit.a. Find the EPQ(Economic Production Quantity)A. How long does it take to produce the batch?B. How many batches will be produced per year?C. What is the maximum inventory level?D. What is the total cost per year?E. A supplier offers to sell a similar component for $ 25 per unit with a charge$ 5 per service per order. Should the company accept the offer?F. Find the average inventory level for each situation
ABC Company manufactures the product XE-17. The product is sold at a unit price of $70.Variable expenses are $13.50 per unit and fixed expenses are $220,000 per year.Required :a. What should be the product’s CM ratio? b. Calculate the BEP is sales dollars and in units for ABC Company. c. The manager of ABC company estimates that in the coming year, the company’s sales willincrease by $80,000 (from the current sales). How much should the net profit / loss increase/decrease if the fixed costs remain constant? d. The manager of ABC company predicts that by spending an additional $80,000 per year onadvertising and using higher quality raw material (which will in turn increase the raw materialcost per unit by $3), and increasing selling price per unit by 2% (to compensate for theincreased costs), unit sales will increase by two- thirds of the current sales units. Should thecompany go with the manager’s proposed plan? Explain your answer. (Assume that in thecurrent year, the company sold…
ABC Company manufactures the product XE-17. The product is sold at a unit price of $70.Variable expenses are $13.50 per unit and fixed expenses are $220,000 per year.Required :a. What should be the product’s CM ratio? b. Calculate the BEP is sales dollars and in units for ABC Company. c. The manager of ABC company estimates that in the coming year, the company’s sales willincrease by $80,000 (from the current sales). How much should the net profit / loss increase/decrease if the fixed costs remain constant? d. The manager of ABC company predicts that by spending an additional $80,000 per year onadvertising and using higher quality raw material (which will in turn increase the raw materialcost per unit by $3), and increasing selling price per unit by 2% (to compensate for theincreased costs), unit sales will increase by two- thirds of the current sales units. Should thecompany go with the manager’s proposed plan? Explain your answer. (Assume that in thecurrent year, the company sold…
MicroCam produces a single product. Variable cost per unit is $25, and fixed costs are $95,000 per year. If the firm sells 5,000 units per year, what price should be charged for each unit to earn $35,000?
A certain factory produces 2000 Ton per year of its product. Th price of one kilogram is 1.8$. The annual direct production cost is 2million $ when the factory works at its whole capacity. Other fixed costs are 7X10^5 b) If the selling price increases by 10% calculate the increase in the net profit at the whole capacity assuming the taxes are 48% of the gross profit.
A local manufacturer produces a single product that has a selling price of $25.00 per unit. Fixed expenses total $50,000 per year, and the company must sell 10,000 units to break even. If the company has a target profit of $15,000, how many units must be sold?
1. Party Co. produces 1,000 parts per year, which are used in the assembly of one of its products. The unit product cost of these parts are: Variable manufacturing cost, P12.00; fixed manufacturing cost, P9.00. The part can be purchased from an outside supplier at P20.00. If the part is purchased from the outside supplier, two thirds of the fixed manufacturing costs can be eliminated. What would be the annual impact on the company’s net operating income as a result of buying the part from the outside supplier? 2.Division A produces a part that it sells to outside customers. Data concerning this part follows: Selling price to outside customers, P60; Variable cost per unit, P40; Total fixed costs, P100,000; Capacity in units, 20,000 units. Division B of the same company purchases 5,000 units of similar part from an outside supplier at a price of P58 per unit. If Division B wants to purchase 5,000 units from Division A instead, and Division A has no idle capacity, what should be the…