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ACC - XXX has three bottling plants throughout the country




Question;(1) XXX has three bottling plants throughout the country. Bottling occurs at the regional level because of the high cost of transporting bottled soft drinks. The parent company supplies each plant with the syrup. The bottling plants combine the syrup with carbonated soda to make and bottle the soft drinks. The bottled soft drinks are then sent to regional grocery stores. The bottling plants are treated as costs centers. The managers of the bottling plants are evaluated based on minimizing the cost per soft drink bottled and delivered. Each bottling plant uses the same equipment, but some produce more bottles of soft drinks because of different demand. The costs and output for each bottling plant are: A B C Units Produced 10,000,000 20,000,000 30,000,000Variable Costs $ 200,000 $ 450,000 $ 650,000Fixed Costs $1,000,000 $1,000,000 $1,000,000a. Estimate the average cost per unit for each plant. b. Why would the manager of plant A be unhappy with using the average cost as the performance measure? c. What is an alternative performance measure that would make the manager of plant A happier? d. Under what circumstances might the average cost be a better performance measure?(2) An YYY has the following profitability analysis of its services:AAA BBB CCCRevenues $5,000,000 $10,000,000 $3,000,000Commissions (1,000,000) (2,000,000) (600,000)Payments (3,000,000) (7,300,000) (2,000,000)Fixed Cost (500,000) (500,000) (500,000)Profit $500,000 $200,000 ($100,000)The fixed costs are distributed equally among the services and are not avoidable if one of the services is dropped.What is the profitability of the remaining services if all services with losses are dropped? Continue dropping services until there are NO unprofitable services.(3) ZZZ is a women's clothing retailer. The company started as a mail order company and has expanded into mall department stores. The company now receives approxmately half of its revenues from mail order and half from retail outlets. Over the time period 2002 to 2004, sales increased approximately 25%.DIscuss the relationship between net income annd cash flow from pperations, and among cash flows from operating, investing and financing activities over the three-year period.


Paper#39043 | Written in 18-Jul-2015

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