What was ebit opportunity cost for andrews of the stock out

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Reference no: EM13890743

Performance Analysis and Simulations

It's an online exam, see questions below are the last years questions so see if you are familiar with topic and can answer the questions, once price and everything confirm will send details on how to access the online test.

1. What is the main reason why Capstone companies require an emergency loan from Big Al?

A. Cash budgets that do not take into account earnings per share ratios
B. Cash budgets that into account that investing activities need to be financed by debenture or share issues
C. Cash Budgets that do not take into account depreciation of plant and equipment
D. Cash budgets that are based upon inaccurate sales forecasts that result in inventory shortages (stock outs)
E. Cash Budgets that are based on inaccurate sales forecasts that result in a large build up of unsold inventory (excess inventory)

2. What area/areas of a company's performance are influenced by Sales Budgets?
A. Promotion and knowledge of a product
B. Supply of products to customer and after sales service
C. Customer awareness of product attributes
D. Customers perceived age of the product r E. None of the above

3. What area/areas of a company's performance are influenced by Promotion Budgets?
A. Promotion and knowledge of a product
B. Supply of products to customer and after sales service
C. Accessibility
D. Customers perceived age of the product
E. Distribution and logistics network

4. What is the best long term strategy for reducing the variable labour cost per unit?

A. Decrease MTBF levels
B. Increase production output of existing plant and equipment by working second shifts/overtime to take advantage of economies of scale
C. Purchase sufficient plant and equipment to ensure that no second shifts/overtime is required
D. Decrease automation level of plant and equipment
E. None of the above

5. What is the best long term strategy for reducing the variable material cost per unit?

A. Decrease MIRE levels
B. Increase material productivity index
C. Increase production
D Increase MTBF levels
E None of the above

6. Which strategy is being followed by Erie?
A. Broad Low Cost Leader
B. Niche Low Cost Leader
C. Life Cycle Low Cost Leader
D. Niche Price Leader
E. None of the above

7. Which strategy is being followed by Digby?
a A. Broad Low Cost Leader
B. Broad Differentiator
C. Niche Cost Leader
D. Niche Differentiator
E. None of the above

8. Which company is under-utilizing its plant and equipment?
A. Andrews
B. Baldwin
C. Digby
D Erie
E Ferris

9. Which company's cost of production is benefitting the most from automation?
A. Erie
B. Ferris
C. Chester
D. Digby Andrews

10. Chester has a low end product called Cedar. It has a revision date of 28 November 2018. This means:
A. Chester will commence Research and Development on Cedar at the beginning 2018 with a release of the product in November
B. When Cedar is released the perceived age of it will be 4.3 years
C. Research and Development was working on Cedar throughout 2017
D. The sales of Cedar will improve after the release of the revised product
E. Cedar will become a high end product when it is released

11. Which product would not have incurred an inventory carrying cost?
A. Acre
B. Bid
C. Cake
Fox
E. All of the above

12. In preparing the Production scheduling for Bubble (one of Baldwin's products) for 2015 you are provided with the following information.

2015 Sales Forecast 513,000 units

Current inventory on hand 25,000 units

Baldwin plans for inventory levels at end of year equal to two months of annual sales.

To meet these requirements how many units of Bubble should Baldwin schedule for production?
A) 513,000 units

B) 573,500 units
C) 598,500 units
D) 452,500 units

E) None of the above

13. The Low End Customer Buying Criteria - Round 0 is as follows:

		Expectations	Importance
1.	Price	$13 -$23	53%
2.	Age	Ideal Age = 7 years	24%
3.	Ideal PoSition	Pfmn 3.7 Size 16.3	16%
4.	Reliability	MTBF 12000-17000	7%

Details of Andrew's low end product Acre - Round 0

1.	Price	$21
2.	Age	4.6 years
3.	Position	Pfmn 3.0 Size 17.0
4.	MTBF	14000
5.	Contribution Margin	30%

From the options below choose the best alternative for improving the net profit of Acre over the next four years
A Continually (each year) revise the product in Research and Development to meet the customers ideal position requirements
B In year 1 revise the product's MTBF in Research and Development to 17000 and leave it at this level
C In year 1 increase the selling price of the product to $20.50 and each year thereafter drop the price by $0.50
D. In year 1 reduce the selling price of the product to $13 and each year thereafter drop the price by $0.50
E. Do nothing to the product

14. The High End Customer Buying - Round 4 is as follows: (rtes)

		Expectations	Importance
1.	Ideal Position	Pfmn 12.5 Size 7.5	43%
2.	Age	Ideal Age = 0.0 years	29%
3.	Reliability	MTBF 20000-25000	19%
4.	Price	$28.00-$38.00	9%

Details of Andrew's High end product Adam -Round 4

1.	Price	$36
2.	Age	2.31 years
3.	Position	Pfmn 11.0 Size 8.7
4.	MTBF	24000
5.	Contribution Margin	32%

From the options below choose the best alternative for improving the net profit in the High End segment for Andrews over the next four years

A. Continually (each year) revise Adam in Research and Development to the customers ideal position requirements

B. In year 5 increase the selling price of the Adam to $38 and each year thereafter drop the price by $0.50
C. In year 5 revise the product's MTBF in Research and Development to 25000 and leave it at this level
D. In year 5 reduce the selling price of the Adam to $28 and each year thereafter drop the price by $0.50
E. Do nothing to the product

15. Last year your company built 1,500,000 units of product Able and sold 1,405,000. After 12 months in Research and Development a revision of product Able is due out tomorrow, January 2 (the first business day of this year). What will happen to the unsold inventory of 95,000 units of "old" product Able?
A. They will compete for sales based on the product attributes they were built under before any of the new product Able is offered for sale
B. They will be sold for scrap for 50% of their book value
C. They will be reworked to match the new specifications for product Able
D. They will carried forward as inventory based upon a LIFO inventory valuation assumption a E. They will be written off as obsolete

16. The Production Analysis of Chester in the Capstone Courier at Round 4 indicates that its product Able has a "Capacity Next Round" of 6,500 units. Chester has calculated that it needs to schedule 9,750 units into production to meet the sales forecasts for Year 5.

Which of the following statements is true?

A. Chester will need to revise the sales forecasts as it does not have enough capacity to produce 9,750 units
B. Chester will need to purchase additional plant and equipment to meet the production requirements
C. Chester needs to access its sales forecasts/production capacity on a product basis to determine its ability to meet the sales forecast requirements
D. Chester will need to work a second shift/overtime at around 50% to meet the sales forecast requirements
E. None of the above statements are true

17. 1n 2017 Andrews stocked out of its High End product Alpha. The Capstone Courier reports the following in relation to Alpha:

Potential Market Share 28%

Actual Market Share 24%

2017 Selling Price $36.50

Contribution Margin 32%

High End Industry Demand for 2017 was 4,000,000 units

What was the EBIT opportunity cost (lost EBIT) for Andrews of the stock out?

A. $5,840,000

B. $3,971,200

C. $1,868,800

D. $7,708,800

E. None of the above

18. Assuming that there are no changes to the products and prices for 2018 what sales forecast would be the most accurate (within 5,000 units) for Agape in 2018.

A. 396,000 units
B. 468,000 units C. 592,000 units
D 500,000 units
E 689,000 units

19. What advice would you offer Ferris with regard to their product Fuel?

A. Research and Development required on the product in 2018 to reduce size co-ordinate to 6.0

B. Increase Sales Budget of Fuel to $1,500. This will improve accessibility of both Fuel and Fume

C. Reduce price of Fuel down to $31.50

D. Do nothing. Fuel sales are set to improve in 2018 as the product gets closer to the ideal age

E. Research and development required in 2018 to position Pfmm 6.8 Size 6.6

20. What advice would you offer Andrews with regard to their product Agape?

A. Research and Development required on the product in 2018 to reduce size co-ordinate and improve performance co-ordinate

B. Increase Promotion Budget and Sales Budget to $1,500 and $2,000 respectively

C. Reduce price of Agape down to $32.00 on

D. Do nothing. Make sure that you produce enough as Agape sales are set to improve in 2018

E. Both A and B above

Reference no: EM13890743

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