User Account

All Pages

Expected cost of checking the valve

Assignment Help Managerial Accounting
Reference no: EM132203276

Bilco Oil Company currently sells three grades of gasoline:regular, premium and "regular plus", which is a mixture of regular and premium. "Regular plus" is advertised as being "at least 50% premium". Although any mixture containing 50% or more premium gas could be sold as "regular plus", it is less costly to use exactly 50%. The percentage of premium gas in the mixture is determined by one small valve in the blending machine. If the valve is properly adjusted, the machine provides a mixture which is 50% premium and 50% regular. Assume that if the valve is out of adjustment the machine provides a mixture which is 60% premium and 40% regular.

Once the machine is started it must continue until 100,000 gallons of "regular plus" have been mixe. Cost data available:

Cost per gallon: Premium $0.32

Cost per gallon:Regular $0.30

Cost of checking the valve $80

Cost of adjusting the valve $40

Subjective estimates of the probabilities of the valve's condition are estimated to be:

Event Probability

Valve in adjustment 0.7

Valve out of adjustment 0.3

1)The expected cost of checking the valve and adjusting it if necessary would be?

2) The conditional cost of not checking the valve when it is out of adjustment would be?

Reference no: EM132203276

Questions Cloud

Compute the variable cost per hour : Compute the variable cost per hour and the fixed cost per hour at 650 hours of activity. (Round your answers to 2 decimal places.)
Schedule of cash collections on accounts receivable : A. a schedule of cash collections on accounts receivable for March. B. a schedule of cash disbursements on accounts payable for March.
Develop the argument and supporting evidence : Develop the argument and supporting evidence for your research problem - Find concepts and constructs relevant to your research topic
Monopoly market structure of an industry : 1. What is meant by the Monopoly market structure of an industry? What factors determine that market structure?
Expected cost of checking the valve : 1)The expected cost of checking the valve and adjusting it if necessary would be?
Presentation and analysis of accounting data : By your own understanding, what does the statement "Management accounting is the presentation and analysis of accounting data in a way that's helpful
Calculate the actual profit for january and february : Calculate the actual profit for January and February using absorption costing. You should assume that any under / over absorption of fixed overheads is debited
High-low method of cost estimation : In its slowest month, the company made 700 tables at a total cost of $23,000. Using the high-low method of cost estimation, total fixed costs are:
Calculate the earnings per share for 2015 : There is no preferred stock outstanding. Calculate the earnings per share for 2015.

Reviews

Write a Review

Managerial Accounting Questions & Answers

  An employee writes an anonymous blog on her experience

An employee writes an anonymous blog on her experience at Sears that provides insights into the company's strategy for success.

  Question 1assume the cfo of your organization approaches

question 1assume the cfo of your organization approaches you to ask your advice about implementing the balanced

  Compute its debt ratio as of december

1.Refer to Piaggio's financial statements in Appendix A. Compute its debt ratio as of December 31, 2011, and December 31, 2010.

  Determining the customer margin

Suppose the company decides instead to employ a traditional costing system in which ALL costs are allocated to customers on basis of cleaning hours. Evaluate the margin for the Lazzara family.

  Analyze economic trends of the health care payment system

Analyze the economic trends of the health care payment system and assess the role of ethics and compliance in the health care finance environment.

  About the permanent account

An adjusting entry will not take the format of which one of the following entries? Which of the following is a permanent account?

  Shellhammer company is considering the purchase of a new

shellhammer company is considering the purchase of a new machine. the invoice price of the machine is 170000 freight

  Determine the current weighted average cost of capital

Determine the current weighted average cost of capital for CWC - determine the appropriate discount rate for the healthy bottled water project.

  What activities has your corporation undertaken in term

What activities has your corporation undertaken in term of fulfilling their role as a corporate socially responsible firm?

  Guadelupe company has set the following standard costs

Guadelupe Company has set the following standard costs per unit for the product it manufactures.

  Discuss differences between the profit for the various firms

Calculate the customer level operating profit for each of the above merchandising firms based on the actual number of orders written and Prepare a customer profitability analysis ranking the firms from most to least profitable showing the level o..

  How could management accounting system foster such a culture

How could a management accounting system foster such a culture, or undermine it? What do you conclude are the two main means of measuring service quality at BAA?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd