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Question;Essay Questions;54. The following production costs are;provided for Glenislay Co., a manufacturer of PDA's.;Manufacturing Costs;It has been determined that the PDA's could;be purchased from Integrated Labs at a cost of $90 plus $5 shipping costs.;Considering the offer from Integrated Labs, show whether Glenislay should make;or buy the product.;(a.) Assume 40% of fixed overhead allocated;to making PDA's relates to a production manager who would not be retained if;the PDA's were not produced by Glenislay.;(b.) How would your analysis change if;Glenislay could use capacity resources for alternative activities that would;produce a contribution of $27 per unit?;(c.) What is your understanding of the term;outsourcing. Briefly explain.;55. Digger Company realizes three products;from a single mining process: Products J1, A2, and V3. Each product may be sold;as is in its raw form or processed further into a more refined state. The;additional processing requires no expanded capacity and production costs are;entirely variable. Sales values and cost information are presented below;(a.) Determine whether Digger Company;should sell each product as is or after further processing.;56. The market price for low-end laser;printers is well established at $400 per unit. ABC Technologies is considering;entering this market and has enough available space in their plant to;accommodate a new production line. However, several pieces of new manufacturing;equipment would be required which are estimated to cost $28,000,000. ABC;Technologies requires a minimum ROI of 15% on any product line investment and;estimate that they can capture 100,000 units of the low-end laser printer;market at the prevailing market price.;(a.) Calculate the target cost per unit for;ABC Technologies if it is to enter the low-end laser printer market while;earning the minimum 15% ROI.;57. The following product line information;is for the Swiss Watch Company. The company is considering dropping its;Children's product line due to poor operating income performance. Fixed;expenses are allocated to each product line based on sales revenue.;(a.) Calculate the effect on the Swiss;Company's operating income if the Children's watch product line is;discontinued. Comment on your analysis.;(b.) Assume the Swiss Company discontinues;its Children's product line. Calculate the total operating income for the Swiss;Company.;58. Marshall, Inc., produces three products;but weekly demand for the three products exceeds the available amount of;machine time. Following is information about each product;(a.) Determine how many units each of;Product A, Product B, and Product C that Marshall, Inc., should produce each;week assuming 1,000 hours of available machine time.;59. Use the appropriate factors from Table;6-4 or Table 6-5 to answer the following questions.;(a.) What is the present value of $100,000;in ten years using a discount rate of 8%?;(b.) How much should be invested today at a;return on investment of 16% compounded annually to have $60,000 in ten years?;60. Use the appropriate factors from Table;6-4 or Table 6-5 to answer the following questions.;(a.) Yoko Co.'s common stock is expected to;have a dividend of $3 per share for each of the next four years, and it is;estimated that the market value per share will be $42 at the end of four years.;If an investor requires a return on investment of 12%, what is the maximum;price the investor would be willing to pay for a share of Yoko Co. common stock;today?;(b.) Lashana bought a bond with a face;amount of $1,000, a stated interest rate of 10%, and a maturity date 20 years;in the future for $1,025. The bond pays interest on a semi-annual basis. Five;years have gone by and the market interest rate is now 12%. What is the market;value of the bond today?

 

Paper#45048 | Written in 18-Jul-2015

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