c. Suppose a company has stores in Seattle and Chicago. It is considering importing fine silk clothing from distributors based in Shanghai and Tokyo. The total cost in terms of purchasing the clothing, transporting it, and clearing it through U.S. customs is shown in the following table... City Shanghai Tokyo Fixed Cost (5) 30,000 60,000 Variable Cost ($ per unit of clothing Imported) 75 45 Calculate the cost cross-over point where costs are equal. Show your work.
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- Which of the following is relevant to Kitchenware.com’s decision to accept a special order at a lower sale price from a large customer in China? a. The cost of shipping the order to the customer b. The cost of Kitchenware.com’s warehouses in the United States c. Founder Eric Crowley’s salary d. Kitchenware.com’s investment in its Web siteA laptop manufacturer wants to compare the total cost of assembling its laptops in the United States versus Taiwan. All of the laptops will be sold in the United States. To evaluate inventory, it uses a safety factor of 2.25. The holding cost per laptop is $4.0 per week in the United States and $3.5 per week in Taiwan. The lead time with U.S. production is 2 week, whereas it is 8 weeks with production in Taiwan. In addition, it costs $2.50 to ship laptops to the United States from Taiwan. Weekly demand is 1,200 laptops, with a standard deviation of 1,000. a. What is the per unit holding cost of a laptop with U.S. production? -------------- per unit b. What is the per unit holding cost of a laptop with production in Taiwan? -------------- per unit c. A laptop requires 30 minutes of labor to assemble in the United States or in Taiwan. The total cost of labor in the United States is $44 per hour, while in Taiwan it is $12. What is the change in cost per laptop if it switches production…Beta company sells blouses in Washington, USA. Blouses are imported from Pakistan and are sold to customers in Washington at a profit. Salespersons are paid basic salary plus a decent commission of $14 on each sale made by them. Selling price and expense data is given below: Selling Price $80.00 Variable Costs Invoice $36 Commission $14 Total Variable $50 Annualized Fixed Rent $160,000 marketing $300,000 Salaries $140,000 Total Fixed $600,000 Compute the break-even point in units and in dollars using the information given above. Prepare a CVP graph (break-even chart) and show the break-even point on the graph. What would be net operating income or loss if company sells 18,500 blouses in a year? If the manage is paid a commission of $6 blouse (in addition to the salesperson’s commission), what will be the effect on company’s break-even point? As an alternative to (3) above, company is thinking to pay $6 commission to manager on…
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- A luggage buyer plans a European buying trip to purchase $250,000 (cost value) of assorted travel packs. On the first stop in London, orders are placed for $92,000 (at cost) for an assortment of leather luggage, which will be priced at $180,000 retail. If the average markup is targeted at 52.0%, what markup percentage should be taken on the balance of the European orders?A company with a plant in Basel can be served by bothrail and truck at a cost of €250 and €1500 per load, respectively. Thetransit time for the train is 15 days while for the truck is 5 days. (a) Ifthe daily cost of transit inventory is €100, which transportation modeis more economical attractive? (b) What will be the costs involved, ifthe daily inventory carrying cost is €50? (c) Identify related principlesneed to consider when designing a transportation system.If e. procurement sells more than 10,000 packages, Wang receives an additional $8 for each package sold beyond the 10,000 level. Q.1. What is the unit cost to ECG of Wang’s software code included in its e. procurement package if it sells (a) 2,000 packages, (b) 6,000 packages, (c) 10,000 packages, and (d) 20,000 packages? Comment on the results. Q.2. To predict ECG’s total cost of using Wang’s software code in e.procurement, which unit cost (if any) of (a) to (d) in requirement one would you recommend ECG use? Explain.
- Required: Calculate and explain your answer related to the transfer pricing based on the condition: a. Gondo Sentosa sales per month still 30 tons and Ageng Sentosa sales per month 150 tons. b. Gondo Sentosa sales per month still 30 tons and Ageng Sentosa sales per month 100 tons. c. Gondo Sentosa sales per month still 30 tons and Ageng Sentosa sales per month 135 tons.Global Reach, Inc., is considering opening a new warehouse to serve the Southwest region. Darnell Moore, controller for Global Reach, has been reading about the advantages of foreign trade zones. He wonders if locating in one would be of benefit to his company, which imports about 90 percent of its merchandise (e.g., chess sets from the Philippines, jewelry from Thailand, pottery from Mexico, etc.). Darnell estimates that the new warehouse will store imported merchandise costing about 16.78 million per year. Inventory shrinkage at the warehouse (due to breakage and mishandling) is about 8 percent of the total. The average tariff rate on these imports is 5.5 percent. Required: 1. If Global Reach locates the warehouse in a foreign trade zone, how much will be saved in tariffs? Why? (Round your answer to the nearest dollar.) 2. Suppose that, on average, the merchandise stays in a Global Reach warehouse for nine months before shipment to retailers. Carrying cost for Global Reach is 6 percent per year. If Global Reach locates the warehouse in a foreign trade zone, how much will be saved in carrying costs? What will the total tariff-related savings be? (Round your answers to the nearest dollar.) 3. Suppose that the shifting economic situation leads to a new tariff rate of 13 percent, and a new carrying cost of 6.5 percent per year. To combat these increases, Global Reach has instituted a total quality program emphasizing reducing shrinkage. The new shrinkage rate is 7 percent. Given this new information, if Global Reach locates the warehouse in a foreign trade zone, how much will be saved in carrying costs? What will the total tariff-related savings be? (Round your answers to the nearest dollar.)Hans Brinker is assistant vice-president for marketing for Skagen Ice Skate Company (SIS). SIS does all of its own manufacturing in Denmark and then distributes worldwide through its sales office. World prices for foreign sales offices are set by the home office. Brinker is now setting the price list for all U.S. sales offices, and needs prices set for the coming year. The current spot rate is ?? = ???? $ = 5.6050, with a one-year forward rate of ?? = ???? $ = 5.5685. The one-year deposit rates for Danish krone and U.S. dollars are 1.5% and 1.35%, respectively. SIS’s best-selling professional figure skate, the Royal Silver Blade, is currently priced at $450 to U.S. retailers. Current inflation estimates for Denmark and the United States are both about 3%. SIS’s policy is to try to absorb about 50% of all exchange rate-induced price increases, but pass along 100% of all exchange rate price decreases if possible. The world skate business is competitive. Brinker phones you and explains…