Question 3 (6 marks)Rad Inc. makes two boats in addition to their regular fleet. These two boats, the AFQ3 andABQ7, can be special ordered and the company will occasionally offer them for sale withoutorders when the company resources permit their production. In total 2400 machine-hours areavailable for making both products. The AFQ3 requires 4 hours per unit and the ABQ7 requires6 hours per unit. Also available are 1600 person-hours for painting the products. The respectivenumber of person-hours required for painting the AFQ3 and ABQ7 are 2 and 4 respectively. Thecompany has orders for 240 units of the A-Fly. Each AFQ3 contributes $250 to company profitswhile the ABQ7 contributes $320 to company profits.a.State the objective function and the constraints related to the above conditions. 3 marksb. Sketch the constraints to this linear programming problem, determine the points thatmake the feasible region and the optimal number of A-Fly and B-Fly. (Show yourcalculations). 3 marks

Part 2: Explanation:Step 1: Objective Function:The objective function represents the goal of the…

Answered: Question 3 (6 marks) Rad Inc. makes two…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 4EB: Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all...

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Question iii) Han products manufacturing 40,000 units of part S-9 each year for use of its production line. A this level of activity, the cost per unit for part S-9 is given as follows : DM - $4.60; DL - $12; VMOH $3.60; FMOH $6. An outside supplier has offered to sell 40,000 units of part S-9 each year to Han products for $25 per part. If Han products accepts this offer, the facilities now being used to manufacturing part S-9 could be rented to another company at an annual rental of $80,000. However. Han products has determined that 2/3 of FMOH being applied to part S-9 would continue even if part S-9 were purchased from the outside supplier. Requirement: iii1. Calculate how much profit will increase/decrease if the outside supplier’s offer is accepted.
In problem 13.4, if the company can ship the units unassembled, it can ship 750 units in a truck. What is the line haul cost per unit now?(13.4) A company ships a particular product to a market located 1500 miles from the plant at a cost of $4.50 per mile. Normally it ships 500 units at a time. What is the line haul cost per unit?
Please answer questions 4a-4d only. Neptune Company has developed a small inflatable toy that it is anxious to introduce to its customers. The company’s Marketing Department estimates that demand for the new toy will range between 20,000 units and 35,000 units per month. The new toy will sell for $9.00 per unit. Enough capacity exists in the company’s plant to produce 25,000 units of the toy each month. Variable expenses to manufacture and sell one unit would be $5.00 , and incremental fixed expenses associated with the toy would total $30,000 per month. Neptune has also identified an outside supplier who could produce the toy for a price of $4.00 per unit plus a fixed fee of $71,000 per month for any production volume up to 25,000 units. For a production volume between 25,001 and 55,000 units the fixed fee would increase to a total of $142,000 per month. Required: 1. Calculate the break-even point in unit sales assuming that Neptune does not hire the outside supplier. 2. How much…
5. Hernandez, Inc. manufactures three models of picture frames for a total of 8,000 frames per year. The unit cost to produce a metal frame follows: Direct materials Direct labor Variable overhead Fixed overhead (based on 8,000 units) (70% unavoidable) $ 6 8 2 5 Total $21 A local company has offered to supply Hernandez the 8,000 metal frames it needs for $18 each. (a) Prepare an analysis for this make or buy decision. babs mont 9269onlw areas bex rito8 (0 2200 orata baxit to tinu eq 22 b200 sideh as al netto lege (b) What should Hernandez do? Explain. ( * 0002) A 000.00 заколол 000 £29 c) If Hernandez buys the product from an outside supplier, it can generate an income of $20,000 from the released productive capacity used to make the product. How does this financially affect your analysis from a? 000,00-0000! (600,0PJ 0000200 $100,001 000.01
The Calvary Company manufactures Part No. XXX for use in its production cycle. The cost per unit for 20,000 units of part No. XXX are as follows: Direct materials P 6 Direct labor 30 Variable overhead 12 Fixed overhead applied 16 P64 The Cross Company has offered to sell 20,000 units of part No. XXX to Calvary for P60 per unit. Calvary will make the decision to buy the part from Cross if there is a savings of P25,000 for Calvary. If Calvary accepts Cross’s offer, P9 per unit of the fixed overhead applied would be totally eliminated. Furthermore, Calvary has determined that the released facilities could be used to save relevant costs in the manufacture of part No. YYY. In order to have a savings of P25,000, the amount of the relevant costs that would be saved by using the released facilities in the manufacture…
ColorPro uses part 87A in the production of color printers. Unit manufacturing costs for part 87A are: Direct materials $8 Direct labor 2 Variable overhead 1 Fixed overhead 4 ColorPro uses 100,000 units of 87A per year. Filbert Company has offered to sell ColorPro 100,000 units of 87A per year for $12. Fixed overhead is unavoidable. Now suppose that ColorPro discovers that other costs will increase by $7,000 per year if the component is purchased rather than made internally. Should ColorPro make or buy the part? Make the part because it will save $100,000 over buying it. Make the part because it will save $107,000 over buying it. Buy the part because it will save $107,000 over making it. Buy the part because it will save $100,000 over making it. e. Make the part because it will save $10,000 over buying it.
3. Zena Technology sells arc computer printers for $55 per unit. Unit product costs are: Direct materials $14 Direct labor 20 Manufacturing overhead 3 Total $37 A special order to purchase 15,000 arc printers has recently been received from another company and Zena has idle capacity to fill the order. Zena will incur an additional $2 per printer for additional labor costs due to a slight modification the buyer wants made to the original product. One-third of the manufacturing overhead costs is fixed and will be incurred no matter how many units are produced. PLEASE NOTE: All dollar amounts, per unit and total, are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). When negotiating the price: What is the minimum selling price per unit that Zena should accept for this special order? per unit. If accepted, what are the total sales?
Adams Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,300 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs $5,900 6,200 3,500 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Adams for $2.60 each. Required X Answer is complete but not entirely correct. $ 19,300 Yes $ 24,180 X No 11,100 26,900 a. Calculate the total relevant cost. Should Adams continue to make the containers? b. Adams could lease the space it currently uses in the manufacturing process. If leasing would produce $11,800 per month, calculate the total avoidable costs. Should Adams continue to make the containers? a. Total relevant cost a. Should Adams continue to make the containers? b. Total avoidable cost b. Should Adams continue to make the containers?
Make-or-Buy Decision (LO2) Switzer Corporation makes motorcycle engines. The company’s records show the following units costs to manufacture part #61645: Another manufacturer has offered to supply Switzer Corporation with part #61645 for the costs of $50 per-unit. Switzer uses 1,000 units annually.
ColorPro uses part 87A in the production of color printers. Unit manufacturing costs for part 87A are: Direct materials $8 Direct labor 2 Variable overhead 1 Fixed overhead 4 ColorPro uses 100,000 units of 87A per year. Filbert Company has offered to sell ColorPro 100,000 units of 87A per year for $12. Fixed overhead is unavoidable. Should ColorPro make or buy the part? Buy the part because it will save $300,000 over making it. Buy the part because it will save 1,100,000 over making it. Make the part because it will save $100,000 over buying it. Buy the part because it will save $100,000 over making it. Make the part because it will save $1,100,000 over buying it.
Winter Sports manufactures snowboards. Its cost of making 1,700 bindings is as follows: (Click the icon to view the costs.) Suppose Livingston will sell bindings to Winter Sports for $14 each. Winter Sports would pay $1 per unit to transport the bindings to its manufacturing plant, where it would add its own logo at a cost of $0.40 per binding. Read the requirements. Requirement 1. Winter Sports' accountants predict that purchasing the bindings from Livingston will enable the company to avoid $2,200 of fixed overhead. Prepare an analysis to show whether Winter Sports should make or buy the bindings. (Only enter the net relevant costs. For the Difference column, use a minus sign or parentheses only when the cost of outsourcing exceeds the cost of making the bindings in-house.) Make Bindings Outsource Bindings Difference (Make-Outsource) - X Binding costs Data table Variable costs: $ 49 Direct materials Direct labor Variable overhead Fixed costs Durahan minn fram manten ? 7 Q A 2 W S 43…
Cinnamon Depot bakes and sells cinnamon rolls for $1.75 each. The cost of producing 500,000 rolls in the prior year was: At the start of the current year, Cinnamon Depot received a special order for 18,000 rolls to be sold for $1.50 per roll. The company estimates it will incur an additional $1,000 in total fixed costs in order to lease a special machine that forms the rolls in the shape of a heart per the customers request. This order will not affect any of its other operations. Should the company accept the special order? (Show your work.)

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