Sunland's Wind Toys manufactures decorative kites, banners, and windsocks. During the month of January, Sunland received orders for 4,000 Valentine's Day banners and 1,400 Easter kites. Because several sewing machines are in the shop for repairs, Sunland's has only 1,200 sewing machine hours available for production of these orders. Each Valentine's Day banner sells for $12.00. The banners take one hour to sew and have a total variable cost of $10.00 per banner. The Easter kites sell for $20.00. They take 30 minutes to sew and have a total variable cost of $14.00. (a) With only 1,200 sewing machine hours available, how many units should Sunland produce for the below items? 700 Kites

Sunland's Wind Toys manufactures decorative kites, banners, and windsocks. During the month of January, Sunland received orders for 4,000 Valentine's Day banners and 1,400 Easter kites. Because several sewing machines are in the shop for repairs, Sunland's has only 1,200 sewing machine hours available for production of these orders. Each Valentine's Day banner sells for $12.00. The banners take one hour to sew and have a total variable cost of $10.00 per banner. The Easter kites sell for $20.00. They take 30 minutes to sew and have a total variable cost of $14.00. (a) With only 1,200 sewing machine hours available, how many units should Sunland produce for the below items? 700 Kites

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 6E: Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of...

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Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of 25,750 and is capable of processing as many as 6,500 purchase orders per year. Each clerk uses a PC and laser printer in processing orders. Time available on each PC system is sufficient to process 6,500 orders per year. The cost of each PC system is 1,100 per year. In addition to the salaries, Elliott spends 27,560 for forms, postage, and other supplies (assuming 26,000 purchase orders are processed). During the year, 25,350 orders were processed. Required: 1. Classify the resources associated with purchasing as (1) flexible or (2) committed. 2. Compute the total activity availability, and break this into activity usage and unused activity. 3. Calculate the total cost of resources supplied (activity cost), and break this into the cost of activity used and the cost of unused activity. 4. (a) Suppose that a large special order will cause an additional 500 purchase orders. What purchasing costs are relevant? By how much will purchasing costs increase if the order is accepted? (b) Suppose that the special order causes 700 additional purchase orders. How will your answer to (a) change?
Wildhorse's Wind Toys manufactures decorative kites, banners, and windsocks. During the month of January, Wildhorse received orders for 5,000 Valentine's Day banners and 1,300 Easter kites. Because several sewing machines are in the shop for repairs, Wildhorse's has only 1,200 sewing machine hours available for production of these orders. Each Valentine's Day banner sells for $11.00. The banners take one hour to sew and have a total variable cost of $9.00 per banner. The Easter kites sell for $15.00. They take 30 minutes to sew and have a total variable cost of $12.00. (a) With only 1,200 sewing machine hours available, how many units should Wildhorse produce for the below items? Kites Banners Based on your calculations above, which products should Wildhorse prioritize for production in January?
Blossom's Wind Toys manufactures decorative kites, banners, and windsocks. During the month of January, Blossom received orders for 4,000 Valentine's Day banners and 1,400 Easter kites. Because several sewing machines are in the shop for repairs, Blossom's has only 1,000 sewing machine hours available for production of these orders. Each Valentine's Day banner sells for $11.00. The banners take one hour to sew and have a total variable cost of $9.00 per banner. The Easter kites sell for $15.00. They take 30 minutes to sew and have a total variable cost of $11.00. (a) With only 1,000 sewing machine hours available, how many units should Blossom produce for the below items? Kites Banners
Pharoah's Wind Toys manufactures decorative kites, banners, and windsocks. During the month of January, Pharoah received orders for 5,000 Valentine’s Day banners and 1,200 Easter kites. Because several sewing machines are in the shop for repairs, Pharoah's has only 1,400 sewing machine hours available for production of these orders. Each Valentine’s Day banner sells for $12.00. The banners take one hour to sew and have a total variable cost of $10.00 per banner. The Easter kites sell for $20.00. They take 30 minutes to sew and have a total variable cost of $14.00. With only 1,400 sewing machine hours available, how many units should Pharoah produce for the below items?
The West Indies School Book Shop sells T Shirts emblazoned with the school’s name and logo. Theshirts cost $2,000 each and management estimates that 900 T Shirts will be sold during each month ofthe year. The annual holding cost for a unit of that inventory is estimated to be 1.5% of the purchaseprice. It costs the Book Shop $500 to place a single order.The maximum sale for the Book Shop for any one week is 300 shirts and minimum sales 150shirts. The supplier takes anywhere from 2 to 4 weeks to deliver the merchandise after the order isplaced.i) Determine the highest number of shirts that should be purchased by the Gift Shop in order tominimize stock administration cost.ii) What is the total stock administration costs?iii)Using the EOQ policy, determine the re-order level, minimum inventory level and maximuminventory level for the T Shirts.
The West Indies School Book Shop sells T Shirts emblazoned with the school's name and logo. The shirts cost $2,000 each and management estimates that 900 T Shirts will be sold during each month of the year. The annual holding cost for a unit of that inventory is estimated to be 1.5% of the purchase price. It costs the Book Shop $500 to place a single order. The maximum sale for the Book Shop for any one week is 300 shirts and minimum sales 150 shirts. The supplier takes anywhere from 2 to 4 weeks to deliver the merchandise after the order is placed. i) Determine the highest number of shirts that should be purchased by the Gift Shop in order to minimize stock administration cost. ii) What is the total stock administration costs? iii)Using the EOQ policy, determine the re-order level, minimum inventory level and maximum inventory level for the T Shirts.
The West Indies School Book Shop sells T Shirts emblazoned with the school’s name and logo. The shirts cost $2,000 each and management estimates that 900 T Shirts will be sold during each month of the year. The annual holding cost for a unit of that inventory is estimated to be 1.5% of the purchase price. It costs the Book Shop $500 to place a single order. The maximum sale for the Book Shop for any one week is 300 shirts and minimum sales 150 shirts. The supplier takes anywhere from 2 to 4 weeks to deliver the merchandise after the order is placed. Determine the highest number of shirts that should be purchased by the Gift Shop in order to minimize stock administration cost. What is the total stock administration costs? Using the EOQ policy, determine the re-order level, minimum inventory level and maximum inventory level for the T Shirts.
May Company produces a variety of labels, including iron-on name labels, which are sold to parents of camp-bound children. (The camps require campers to have their name on every article of clothing.) Each roll consists of 25 yards of paper strip with 1,000 copies of the child’s name. Each yard of paper strip costs $0.30. Manning has budgeted production of the label rolls for the next four months as follows: Rolls in Units March 20,000 April 60,000 May 100,000 June 12,000 Inventory policy requires that sufficient paper strip be in ending monthly inventory to satisfy 20 percent of the following month’s production needs. The inventory of paper strip at the beginning of March equals exactly the amount needed to satisfy the inventory policy. Required 1. Prepare a direct material purchases budget for March, April, and May showing purchases in units and in dollars for…
Patricia's Quilt Shoppe sells homemade Amish quilts. Patricia buys the quilts from local Amish artisans for $220 each, and her shop sells them for $370 each. She also pays a sales commission of 4% of sales revenue to her sales staff. Patricia leases her country-style shop for $800 per month and pays $1,600 per month in payroll costs in addition to the sales commissions. Patricia sold 95 quilts in February. Prepare Patricia's traditional income statement and contribution margin income statement for the month. Prepare the traditional income statement for the month. Patricia's Quilt Shoppe Income Statement For the Month Ended February 28 Less: Less: A
The Book Shop sells emblazoned T Shirts. The shirts cost $2,000 each and management estimates that 900 T Shirts will be sold during each month of the year. The annual holding cost for a unit of that inventory is estimated to be 1.5% of the purchase price. It costs the Book Shop $500 to place a single order. The maximum sale for the Book Shop for any one week is 300 shirts and minimum sales 150 shirts. The supplier takes anywhere from 2 to 4 weeks to deliver the merchandise after the order is placed. i) Determine the highest number of shirts that should be purchased by the Gift Shop in order to minimize stock administration cost. ii) What is the total stock administration costs? iii)Using the EOQ policy, determine the re-order level, minimum inventory level and maximum inventory level for the T Shirts.
Jen and Barry's ice cream shop charges $1.55 for a cone. Variable expenses are $0.25 per cone, and fixed costs total $2,200 per month. A Valentine's Day promotion is being planned for the second week of February. During this week, a person buying a cone at the regular price would receive a free cone for a friend. It is estimated that 725 additional cones would be sold and that 925 cones would be given away. Advertising costs for the promotion would be $140. Required: a. Calculate the effect of the promotion on operating income for the second week of February. b. Do you think the promotion should occur? Complete this question by entering your answers in the tabs below. Required A Required B Calculate the effect of the promotion on operating income for the second week of February. Note: Do not round intermediate calculation and round your final answer to 2 decimal places. in operating income Net
Jen and Barry's ice cream shop charges $1.55 for a cone. Variable expenses are $0.33 per cone, and fixed costs total $2,300 per month. A Valentine's Day promotion is being planned for the second week of February. During this week, a person buying a cone at the regular price would receive a free cone for a friend. It is estimated that 775 additional cones would be sold and that 975 cones would be given away. Advertising costs for the promotion would be $155. Required: a. Calculate the effect of the promotion on operating income for the second week of February. b. Do you think the promotion should occur? Complete this question by entering your answers in the tabs below. Required A Required B Do you think the promotion should occur? < Required A Required B