For each expense that is variable with respect to revenue hours, calculate the cost per revenue hour. Expense January February March Power: Cost 1,546 1,485 1,697 Total Revenue Hours 329 316 361 Cost per Revenue Hour $4.70 $4.70 $4.70 Hourly Personnel: Cost 7,896 7,584 8,664 Total Revenue Hours 329 316 361 Cost per Revenue Hour $24.00 $24.00 $24.00 Total Cost per Revenue Hours = $4.70 + $24.00 = $28.70 3. Create a contribution margin income statement for Salem Data Services. Assume that intracompany usage is 205 hours. Assume commercial use is at the March level.
Broadway Café | | | | | | | Units sold per month: | 20,000 | Unit variable costs: | $0.30 | | | | Average unit sales price: | $2.20 | Projected fixed costs: | $7,500 | | | | | | | | | | | | | | | | | | Sales month | Units | Sales | Fixed Costs | Variable Costs @ .30 | EBIT | | January | 6,582 | 14480.40 | 7500 | 1974.60 | 5005.40 | | February | 11,121 | 24466.20 | 7500 | 3336.30 | 13629.90 | | March | 14,178 | 31191.60 | 7500 | 4253.40 | 19438.20 | | April | 13,692 | 30122.40 | 7500 | 4107.60 | 18514.80 | | May | 11,597 | 25513.40 | 7500 | 3479.10 | 14534.30 | | June | 9,599 | 21117.80 | 7500 | 2879.70 | 10738.10 | | July | 9,913 | 21808.60 | 7500 | 2973.90 | 11328.70 | | August | 10,926 | 24037.20 | 7500 | 3277.80 | 13259.40 | | September | 14,349 | 31567.80 | 7500 | 4304.70 | 19763.10 | | October | 12,965 | 28523.00 | 7500 | 3889..50 | 17133.50 | | November | 6,972 | 15338.40 | 7500 | 2091.60 | 5746.80 | | December | 2,455 | 5401 | 7500 | 736.5 | -2835.50 | | | | | | Sum: | 146256.70 | | | Broadway Café | | | | | | | | | | |
Solutions to Week 1 HW Chapter 1 E14. [LO 5]. Incremental revenue per day $2,500 Less incremental costs: Labor $700 Parts 500 Transportation 100 Office staff 200 1,500 Incremental Profit per Day $1,000 Opportunity cost = $1,000 per day 52 days = $52,000 Rent and depreciation do not enter into the calculation of the opportunity cost since these costs are not incremental (they will be incurred whether or not Ken decides to stay open on Saturday). P2. [LO 5 and 6].
Proj 430 Week 1 Case 1 1. J & D accounting created an Information Services Division for studies and analysis to be able to compete against larger firms. With its increased employees and customers there is no structure keeping them in order. Projects are incomplete, customers do not know where to get answers from, and the director of ISD is forced to handle daily activities instead of strategic planning and policy formulation. The director will be reassigned and the systems manager will be taking her spot.
Answers: a. b. C = production time per day/required output per day = (8 hour/day)(3600 seconds/hour)/240 units per day = 120 seconds per unit c. Work station Task Task time Idle
In 1988, the average wage rate was $9.45 an hour and in 2008 the average wage rate was $18.00 an hour. The CPI in 1988 was 118.3 and in 2008 it was 215.3. Which real wage rate is higher? Real Wage Rate in 1988: $9.45/118.3 x 100 = $7.99 Real Wage Rate in 2008: $18.00/215.3 x 100 = $8.36 Answer: The Real Wage Rate in 2008 was higher than the Real Wage Rate in 1988. Chapter 24 Potential GDP Page 631 7.
Credit terms currently offered to its customers is “net 60”. He has analysed the payment pattern of the customers. If any account is not collected within 90 days after sales, that account is considered as not collectible and written off as bad debt loss. However, it is seen that all the customers pay within 90 days and the company has not written off any account as bad debt. The current aging schedule of accounts receivables is shown in Exhibit 4.
Stock Number Annual $ Volue J24 12,500 R26 9,000 L02 3,200 M12 1,550 P33 620 T72 65 S67 53 Q47 32 V20 30 What are the appropriate ABC groups of inventory items? (4 points) Stock Number Annual $ Volume % of Annual Volume % of Total Class: J24 12,500 46.21 79.48 A R26 9,000 33.27 L02 3,200 11.83 19.85 B M12 1,550 5.73 P33 620 2.29 T72 65 0.24 0.67 C S67 53 0.20 Q47 32 0.12 V20 30 0.11 Total Annual Volume 27,050 Problem 2: Assume you have a product with the following parameters: Holding cost per per unit Order per order What is the EOQ? What is the total cost for the inventory policy used? (4 points) Problem 3: Assume that our firm produces type C fire extinguishers. We make 30,000 of these fire extinguishers per year.
Compute the labor rate and efficiency variances for the month. Was paying workers the actual wage rather than the standard wage an efficient strategy for Loring? Actual wage rate per hour = Actual direct labor cost / actual direct labor hours = $24,464 /2,780 = $8.80 Labor rate variance = (Actual Rate - Standard Rate) x Actual labor hours = ($8.80- $8.25) x2,780 = $1,529 U Labor efficiency variance = (Standard time for actual output - actual time) x Standard labor rate per hour = [(4,000x 0.75) - 2,780] x$8.25 = $1,815F It seems that it made more sense for Loring to pay the actual wage rather than the standard wage. The workers worked efficiently for 2780 hours instead of the standard 3000 (0.75 hours x 4000) hours allowed. Seems like an efficient strategy.
Estimate the output Q when L=10,000 hours; K = 7,000 hours; and F = 8,000 gallons MP (L)= a*Q/L = 0.28*12,332.58/10,000= 0.345 MP (K)= b*Q/K= 0.63*12,332.58/7000= 1.109 MP (F)= c*Q/F= 0.12 12,332.58/8000= 0.184 C. Find the marginal products of Labor, Capital and Fuel when L=10,000 hours; K = 7,000 hours; and F = 8,000 gallons Output elasticity of L= 0.28 Output elasticity of K= 0.63 Output elasticity of F= 0.12. L+K+F= 1.03. A 10% increase in L= 0.31, K = 0.69, F= 0.13. L increased by 10% then output increases by = 0.03 K increased by 10% then output increases by = 0.07 F increased by 10% then output increases by = 0.01 D. Find the output elasticities of L, K and F. By how much does output increase when each input increases by 10%, one at a time? L+K+F= 1.03 Output increase by 10% at a time: L= .31 K= .68 F= .13 10% increase in: L, Output increase by .03 K, Output increase by .07 F, Output increase by .01 E. Determine the Returns to Scale in production.