Using the criteria above, we have chosen the best method of production for each requirement in order to help us make our final decision. Income - Level Production Based on income, level production is the best choice. Level production will eliminate overtime costs of $225K and direct labor costs of $265K, reducing the percentage of COGS from 70% to 65.1% of sales. A portion of these savings would be offset by higher storage costs of $115K, which will increase operating costs each month. However, even with these additional costs, net profit under level production is projected to be $520K, which is a 48% increase over the seasonal production estimate of $351K.
For instance in an article I read, it said with the development of construction, operation, and new investment, that thousands of permanent jobs will have risen (1). Another argument in favor of the proposal is securing transportation. To further illustrate having known that the ambassador bridge is the busiest in the nation, the new bridge would add redundancy as an alternative route for industrial traffic and provide security incase anything would happen to the ambassador
In order to achieve her target of $300,000 in working capital reduction, Judy will need to focus on raw materials and investments in MRO parts and supplies. Pagers only cost $100-$150 each and are a “throw away” item. Even if Cottrill purchased all of its pagers, the total investment would only be $2,000 - $3,000. Furthermore, it remains to be seen if leasing is cost-effective. The administrative and financing costs may make
Executive Summary Statement of the Problem Amtrak is preparing to launch its advanced high-speed, highly efficient, and newly renovated transportation railway system known as “Acela” in the northwestern region of the U.S. beginning April, 1999. Amtrak expects to specifically devote Acela as a means to meet the company’s mandate of becoming profitable by 2002. The new locomotives and train cars will come at a cost of $750 million, of which $482 million has been secured and the remaining $268 million must be financed accordingly; Amtrak is therefore reviewing the following alternatives based on a cash-flow NPV analysis. The three competing strategies are: to use federal funding from government subsidies, to leverage-lease from BNY Capital Funding (BNYCF), or to simply borrow and purchase the equipment on its own. Amtrak must decide which strategy is most beneficial to the corporation.
Indirect costs must be Is this essay helpful? Upgrade your account to read more and access more than 600,000 just like it! get better grades estimated for each cost object and it is important to assess how much of the costs allocated to each object are indirect as the greater the proportion of indirect costs allocated, the greater the margin for error in these estimations. 5. Managers need to be careful of overpricing or under-pricing goods due to allocation of costs to each product.
As a result, management took into account that changing both supply and demand according to market activity could improve its business performance. In attempt to capture the above factors, American Airlines management developed a yield management system which considered capacity, historical bookings, pricing, cancellations and no-show rates, and costs of oversales and spoilage. If passenger-requested booking price was equal to or greater than the bid price, management must accept all passengers requested at that price. In terms of the-no-show rate, for local passengers had been 15 per cent whereas for flow passengers had been 20 per cent. Two additional costs include spoilage and oversale.
“D’ Roulhac Custom Baskets financial goal is to obtain a moderate percentage of the industry market share locally. Another goal is to branch out nationally and secure a larger percentage of the market share. To accomplish this, the company will need to institute low cost initiatives such as reducing the cost of capital in relation to that of competitors and industry. Additionally, “D’ Roulhac Custom Baskets will need to leverage its position; use alternate financial strategies such as sale and leaseback options on the building and equipment (Pearce & Robinson, 2004). “D’ Roulhac Custom Baskets expects to have a two to six percent increase in return on capital investments over the next three years.
Question: (TCO4) BMX Co. sells item XJ15 for $1,000 per unit, and has a cost of goods sold percentage of 80%. The gross profit to be found for selling 20 items is: Your Answer: Instructor Explanation: Their income statement should start with revenues minus cost of goods sold equals gross profit. (20*$1,000) – [20($1,000.80) ] = Gross Profit. Points Received: 0 of 5 Comments: 3. Question: (TCO4) When the LIFO method is used, cost of goods sold is assumed to consist of: Your Answer: Instructor Explanation: LIFO means last in, first out, so the last units purchased are sold and the remaining units are assumed to consist of the first units.
The schedule of cost of goods sold shows the cost of goods manufactured will positively affect the number cost of goods sold, reducing $40,000 labor cost eventually save $40,000 of cost of goods sold. In the income statement, we found net income is significantly affected by product sales and cost. When sales and other expenses stay the same as and cost of goods sold are reduced $40,000, net income increases from $30,750 to $55,490. In addition, we can also estimate the future expected net income for a company by calculating current actual income and probability of sales revenue increase or decrease percentage. Higher probability with a positive percentage of sales revenue will result a higher expected
That is already about 78% of your total income already. If you were smart and took public transportation instead of buying for a car and paying gas for it, you’d save about $230.00. If you take the train or bus, you’ll only pay $70.00 monthly. Each ride is only $2.00 and you can get a Charlie Card. Opposed to a car, monthly cost of gas is about $200.00 per month, filling up an average of four times a month.