Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
A soft drink maker wants to expand into a neighboring country. They want the product bottled in that country to avoid political issues and to enhance the local image of the product. They have identified two options for the expansion. The first is to build a highly automated plant. The economies of scale would allow them to produce a can of soda for $0.04 and the distribution costs would be $0.02 per can. This facility would cost $1 million per year in fixed costs. The second option would be to build a semi-automated plant that would cost $650,000 per year in fixed costs. However, the cost to produce a can would be $0.07 and the distribution cost would be $0.04 per can.
a) Over what range of product would each plant be preferred?
b) Suppose the company believes that the demand would be approximately 6,000,000 cans per year. Suppose all costs except the variable cost (sum of the production and distribution costs) for the highly automated process are certain and can not change. What would the variable cost (the sum of the production and distribution cost) per can for the highly automated process have to be so that the soft drinker maker is indifferent between the two types of plants?
c) Now suppose each alternative has a different capacity. The total estimated demand for the year is 5,000,000 if the company sells each can for $0.32. However, only the highly automated process can produce and distribute this amount. If the semi-automated process is used, the company would only be able to produce and distribute 4,200,000 cans annually. To offset the lower volume, the company will raise the price of each can to $0.35. It will be able to sell all it produces at this price. Using all of the information presented in the problem, which process should it use? Why?
Example of Job Order Costing The given transactions were made by a company in the month of December. Direct Materials a) 8,000/- was bought on credit, out of these
answers to figure 5 exercise 18.10
Batch Costing This is a kind of job costing that is utilized when production consists of limited repetitive work and definite number of item manufactured in one batch. A batc
The following information has been prepared for XYZ Ltd by their assistant accountant. The risk free rate of interest on government securities in 2008 is 7.3% Required:
formula for calculting WACC
Assumptions of CVP This chapter has given information on how to apply CVP for the business analysis. Most of this analysis is keyed to the model of how profitability is impacte
Purposes of standard cost accounting connection - suppose you were a management consultant and the client asked you the advantages and disadvantages of using standard costs and cos
Derive a truth table for a combinational logic circuit that is to decode a 4-bit BCD representing a number in the range 0-9 and generate an appropriate 7-bit output to illuminate t
Material Costs Material refers to each physical input into the production procedure. They involve the giving as: Raw material refers to bought in material that is used
raw an organization chart of any actual or hypothetical manufacturing organization to show the position of management/cost accounting department within an organization and discuss
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd