1182 Words5 Pages

Specialty Toys Case Study
1. The mean is 20,000 units and there is a 95% probability that demand will be between 10, 000 and 30,000 units. This means there is a .025% chance that the demand will be outside of 10,000 and 30,000. Using the chart, we find that z=-1.96. Using the following calculation, we find: z= x- μ σ
-1.96 = 10,000 – 20,000 σ σ=5102 Standard deviation σ = 5,102 μ = 20,000 mean
2. Stock outs were calculated by the four management numbers. Equation is: z = (x – μ)/ σ 15,000: Z = (15,000-20,000)/5102 z = -0.98
Then, reference the cumulative probabilities for standard deviation table in the beginning of the book to identify what -0.98 represents, which is .1635. Since stock outs are any quantity greater than what management suggested, they need to be subtracted from 1.
1 - .1635 = .8365 which = 83.65% Same logic/steps for the rest of the values: 18,000 24,000 28,000 Z = (18,000-20,000)/5102 z=(24,000-20,000)/5102 z=(28,000-20,000)/5102 z = -.39 z=.78 z= 1.57 1 - .3483 = .6517 1 - .7823 = .2177 1 –.9418 = .0582 which = 65.17% which = 21.77% which = 5.82%
3. Projected Profit for management under three scenarios which are 10,000 20,000 and 30,000 units
Order | 10,000 units | 20,000 units | 30,000 units | 15000 | 8*10000-11*5000 =$25000 | 8*15000=$120000 | 8*15000 = $120000 | 18000 |

Related

## Speciality Toys Essay

276 Words | 2 PagesUsing the following calculation, we find: z= x- μ σ -1.96 = 10,000 – 20,000 σ σ=5102 Standard deviation σ = 5,102 μ = 20,000 mean 2. Stock outs were calculated by the four management numbers. Equation is: z = (x – μ)/ σ 15,000: Z = (15,000-20,000)/5102 z = -0.98 Then, reference the cumulative probabilities for standard deviation table in the beginning of the book to identify what -0.98 represents, which is .1635. Since stock outs are any quantity greater than what management suggested, they need to be subtracted from 1. 1 - .1635 = .8365 which = 83.65% Same logic/steps for the rest of the values: 18,000 24,000 28,000 Z = (18,000-20,000)/5102 z=(24,000-20,000)/5102 z=(28,000-20,000)/5102 z = -.39 z=.78 z= 1.57 1 - .3483 = .6517 1 - .7823 = .2177 1 –.9418 = .0582 which = 65.17% which = 21.77% which = 5.82% 3.

## Ch 11 Solutions

6166 Words | 25 PagesFinding the initial investment Answer: $20,000 Purchase price of new machinery $3,000 Installation costs $4,500 After-tax proceeds from sale of old machinery $18,500 Initial investment E11-4. Book value and recaptured depreciation $175,000 $124, 250 $110,000 $50,750 $50, 750 $59,250 Recaptured depreciation E11-5. Initial investment purchase price installation costs – after-tax proceeds from sale of old asset change in net working capital $55,000 $7,500 – $23,750 $2,000 $40,750 Answer: Book value Answer: Initial investment CAPITAL BUDGETING PROBLEMS: CHAPTER 11 Solutions to Problems Note: The MACRS depreciation percentages used in the following problems appear in Chapter 4, Table 4.2. The percentages are rounded to the nearest integer for ease in calculation. For simplification, 5-year-lived projects with 5 years of cash inflows are typically used throughout this chapter.

## Accounting Essay

1568 Words | 7 PagesQuestion: (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.

## Marriott Issues Essay

1477 Words | 6 PagesWe created the following examples to show how WACC could potentially influence Marriott’s financial decisions: Suppose Marriott is taking on a project that requires a $100,000 initial investment, which produces cash inflows of $20,000 per year for 10 years. If we use Marriott’s current WACC of 9.29% the project would produce an NPV of $26,730. If we use the Target WACC, 10.24% for Marriott the NPV would be $21,634. Deciding based on the assumption of an NPV of $26K but it will actually achieve a NPV of $21K. Management will have to explain to shareholders why they were unsuccessful in achieving increased shareholder value.

## Financial International Essay

599 Words | 3 Pagesc. What fraction of the economic burden of this tax is borne by consumers and what fraction is borne by sellers? 2 4. Jose has an income of $1,000. The price of good X is $50 and the price of good Y is $20. He initially maximizes his utility by consuming 10 units of good X and 25 units of good Y. a.

## Cost, Volume, and Profit Formulas

702 Words | 3 PagesCost, Volume, and Profit Formulas There are five components of CVP (cost-volume-profit) analysis; 1. volume or level of activity 2. unit selling prices 3. variable cost per unit 4. total fixed costs 5. sales mix Each component are import to the CVP, volume or level of activity can be explain as sales of a product or the number of units sold. Unit selling prices is the amount the product is sold. An example of this is a department store is selling two ties for $20 dollars, then the unit price of each tie is $10 dollars. The variable cost per unit is how much does it really take to make a product. Such as the tie is selling for ten dollars per unit but it only cost two dollars in materials to make.

## Booker Jones Essay

607 Words | 3 PagesBooker Jones increased production by 20,000 barrels in 1961. If the cost of each barrel is $31.50, then these 20,000 barrels would cost $630,000. This will be added to the inventory account and hence will generate pretax profit of ($630,000 – 407,000) = $223,000. b. If the change were made retroactively as of July 1, 1959 (by adding the cost of barrels to all whiskey in inventory), what would be the effect on i.

## Untitled Essay

291 Words | 2 PagesThe manager cited the resulting high depreciation charges as the justification for the price boost. He asked the president of the company to instruct Division P to buy from S at the $220 price. He supplied the following information: P's annual purchases of component 2,000 units S's unit and batch-related costs per unit $190 S's capacity related costs per unit $20 S's required return on investment $10 Suppose there are no alternative uses of the S facilities. Required 1) Will the company as a whole benefit if P buys from the outside suppliers for $200 per unit? 2) Suppose the selling price of outsiders drops another $15 to $185.

## Margin Of Safety Explanation

811 Words | 4 PagesThis percentage is obtained by dividing the margin of safety in dollar terms by total sales. Following equation is used for this purpose. [Margin of Safety = Margin of safety in dollars / Total budgeted or actual sales] Example: Sales(400 units @ $250) | $100,000 | Break even sales | $87,500 | Calculate margin of safety | Calculation: | Sales(400units @$250) | $100,000 | Break even sales | $ 87,500 | | --------- | Margin of safety in dollars | $ 12,500 | | ======= | Margin of safety as a percentage of sales:12,500 / 100,000= 12.5% | It means that at the current level of sales and with the company's current prices and cost structure, a reduction in sales of $12,500, or 12.5%, would result in just breaking even. In a single product firm, the margin of safety can also be expressed in terms of the number of units sold by dividing the margin of safety in dollars by the selling price per unit. In this case, the margin of safety is 50 units ($12,500 ÷ $ 250 units = 50 units).

## Sequence Theory and Its Real World Application

668 Words | 3 Pages(Bluman, 2011) Here is how I would work out the problem I can see that the price changes every ten feet that we build upward the price increases $25 dollars, which is added to the previous price. The repeated addition tells us that this is an arithmetic sequence, 10,20,30,40,50,60,70,80,90 that has 9 total terms. The problem is solved by identifying the essential numbers for the equation, which is an = a1 + (n-1)d CITATION Blu11 \l 1033 (Bluman, 2011). n = the number of terms altogether which is 9 d = the common difference d=25 a = the first term in the sequence which is 100. a9 = a1 + (9-1)25 a9= 100 + (8)25 a9= 100 + 200 a9= 300 With a9 now identified, I can find the sum for building the 90-foot tower using another formula made for finding the sum of arithmetic sequences. sn=n(a1+an)2 (Bluman, 2011) S9=9(100+200)2 S9=9(300)2 S9 = 4.5(300) S9= 1350 Another way to figure this out is to

### Speciality Toys Essay

276 Words | 2 Pages### Ch 11 Solutions

6166 Words | 25 Pages### Accounting Essay

1568 Words | 7 Pages### Marriott Issues Essay

1477 Words | 6 Pages### Financial International Essay

599 Words | 3 Pages### Cost, Volume, and Profit Formulas

702 Words | 3 Pages### Booker Jones Essay

607 Words | 3 Pages### Untitled Essay

291 Words | 2 Pages### Margin Of Safety Explanation

811 Words | 4 Pages### Sequence Theory and Its Real World Application

668 Words | 3 Pages