Reference no: EM13960366
Binder Manufacturing produces small electric motors used by appliance manufacturers. In the past year, the company has experienced severe excess capacity due to competition from a foreign company that has entered Binder's market. The company is currently bidding on a potential order from Dacon Appliances for 6,000 Model 350 motors. The estimated cost of each motor is $40, as follows:
Direct material.........$20
Direct labor...........$5
Overhead............$15
Total.............$40
The predetermined overhead rate is $3 per direct labor dollar. This was estimated by dividing estimated annual overhead ($15,000,000) by estimated annual direct labor ($5,000,000).The $15,000,000 of overhead is composed of $6,000,000 of variable costs and $9,000,000 of fixed costs. The largest fixed cost relates to depreciation of plant and equipment
Required:
a. With respect to overhead, what is the opportunity cost of producing a Model 350 motor?
b. Suppose Binder can win the Dacon business by bidding a price of $37 per motor (but no higher price will result in a winning bid). Should Binder bid $37?
c. Discuss how an allocation of overhead based on opportunity cost would facilitate an appropriate bidding decision.
|
Leadership skills through a college course or courses
: Should leadership be the manager's job, or should leadership be a shared process? Explain your answer. Are you interested in sharing leadership, or do you prefer to be a follower. Explain your answer.
|
|
Create windows form that prompts user survey responses
: Write a GUI program that reads a five-letter word from the user and produces all possible three letter combinations that can be derived from the letters of the five-letter word.
|
|
Distinguish among cost center profit centers
: Distinguish among cost centers, profit centers, and investment centers.
|
|
What is largest premium that investor will willing to pay
: How does the premium change as the parameter ã increases?
|
|
With respect to overhead, what is the opportunity cost
: Discuss how an allocation of overhead based on opportunity cost would facilitate an appropriate bidding decision.
|
|
Employee turnover in the hospitality industry
: Employee turnover in the hospitality industry averages 400% annually. This means that, on average, 100% of the staff of a restaurant, hotel, airline, cruise ship, etc. is replaced four (4) times per year.
|
|
Briefly summarize the events of the case study
: Briefly summarize the events of the case study. The social movement in each case study contained both informal and formal organizational traits. Provide examples of both the informal and formal organization of the social movement in the case study
|
|
Compute the posterior probabilities under each prediction
: Based on this info, how do I compute the posterior probabilities under each prediction, and determine if the study should be undertaken?
|
|
Market research firm specializingin political polls
: Policy Pollsters is a market research firm specializingin political polls. Records indicate in past elections,when a candidate was elected, Policy Pollsters hadaccurately predicted this 80 percent of the time andthey were wrong 20% of the time.
|