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MBA640 questions




Question;3. Simpson Inc. produces a specialty;top-quality juice machine. The product;the GK 78, requires four processes to be completed. Specifically, these processes are exterior;construction, pulp filter insertion, painting, and packaging. Each function is performed at separate;workstations with different completion ratios;? Exterior;construction can manufacture 100,000 juicer exteriors per day.;? Pulp;filter insertion can install 30,000 filters every 6 hours.;? Painting;can decorate 5,000 juicers every half hour.;? Packaging;can package 8,000 juicers per hour.;Required;a) How many;GK 78 machines can Simpson Inc. manufacture per month (assume an average of 30;days per month and 8 hours per day)?;b) On which;function should Simpson spend money to improve throughput?;c) If;Simpson sells each juicer for $65 and has variable costs of $45, should Simpson;spend $300,000 to improve the workstation that is the current bottleneck until;a second workstation becomes a bottleneck?;4. A company sells three products, X;Y, and Z, with the following characteristics;Product X Product Y;Product Z;Price per unit $18 $21 $25;Variable cost per unit $12 $15 $23;Expected sales (units) 200,000 300,000 400,000;Fixed costs are expected to be $2,300,000.;Required;a) Using the;information provided above, what is the expected level of the operating;profits?;b) Compute;the break-even point in revenues for the company assuming a constant product;mix.;5. Alpha Company produces a variety of;electronic equipment. One of its plants;produces printers, the superior and the regular. At the beginning of the;year 2014, the following data were prepared for this plant;Superior Regular;Quantity 200,000 900,000;Selling;price $500.00 $200.00;Unit;prime cost* $200.00 $90.00;Unit;overhead cost $32.50 $100.00;Prime;cost equals direct materials and direct labor.;The unit;overhead cost is calculated using the predetermined overhead application;rate based on;direct labor-hours.;Upon examining the data, the manager of marketing was particularly;impressed with the per-unit;profitability of the superior printer and suggested that more emphasis be;placed on producing and selling this product.;The plant supervisor objected to this strategy, arguing that the cost of;the superior printer was understated. He;argued that overhead costs could be assigned more accurately by using multiple;cost drivers that reflected each product?s consumption. To convince top management that multiple;rates could produce a significant difference in product costs, he obtained the;following projected information from the controller for the preceding;production output;Activity;Consumption;Overhead Activity Cost;Driver Pool Rate* Superior Regular;Setups Number;of setups $3,000 200 100;Machine costs Machine-hours $ 100;200,000 600,000;Engineering Engineering-hours;$ 40 45,000 120,000;Packing Packing orders $ 30 80,000 220,000;*Cost per unit of cost driver Total overhead cost =;$96,500,000;Required;a) Using the;projected data based on traditional costing, calculate gross profit per unit;and total gross profit for each product.;b) Using the;pool rates, calculate the overhead cost per unit for each product. Using this new unit cost, calculate gross;profit per unit, and total gross profit for each product.;c) In view;of the outcome in requirement 2, evaluate the suggestion of the manager of;marketing to switch the emphasis to the superior model.;d) How does;activity based costing add to Alpha?s competitive advantage?


Paper#54336 | Written in 18-Jul-2015

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