KRadovilsky Manufacturing Company, in Hayward, California, makes flashing lights for toys. The company operates its production facility 300 daysper year. It has orders for about 12,400 flashing lights per year and has the capability of producing 95 per day. Setting up the light production costs$49. The cost of each light is $0.95. The holding cost is $0.15 per light per year.a) What is the optimal size of the production run?units (round your response to the nearest whole number).

The output quantity that minimizes the overall cost of production seems to be the optimal size of…

Answered: Radovilsky Manufacturing Company, in…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11E

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Radovilsky Manufacturing Company, in Hayward,California, makes flashing lights for toys. The company operatesits production facility 300 days per year. It has orders for about12,000 flashing lights per year and has the capability of producing100 per day. Setting up the light production costs $50. The cost ofeach light is $1. The holding cost is $0.10 per light per year.What is the total cost per year, including the cost of thelights?
ETS manufactures a component for its computer products. The annual demand for thiscomponent is 2500 units. The annual cost of maintaining inventory is10% per unit and the cost of preparing an order and setting up productionfor the order is $ 50.The machine used to make this part has a production rate of 10,000units per year and the cost is $ 22 per unit.a. Find the EPQ(Economic Production Quantity)A. How long does it take to produce the batch?B. How many batches will be produced per year?C. What is the maximum inventory level?D. What is the total cost per year?E. A supplier offers to sell a similar component for $ 25 per unit with a charge$ 5 per service per order. Should the company accept the offer?F. Find the average inventory level for each situation
Neptune Company produces toys and other items for use in beach and resort areas. A small, inflatable toy has come onto the market that the company is anxious to produce and sell. The new toy will sell for $2.70 per unit. Enough capacity exists in the company's plant to produce 30,400 units of the toy each month. Variable expenses to manufacture and sell one unit would be $1.72, and fixed expenses associated with the toy would total $44,188 per month. The company's Marketing Department predicts that demand for the new toy will exceed the 30,400 units that the company is able to produce. Additional manufacturing space can be rented from another company at a fixed expense of $2,209 per month. Variable expenses in the rented facility would total $1.89 per unit, due to somewhat less efficient operations than in the main plant. Required: 1. What is the monthly break-even point for the new toy in unit sales and dollar sales. 2. How many units must be sold each month to attain a target profit…
What is the cycle time or a production will be made how often, that is associated with the EPQ from question 17? A toy manufacturer uses 100,000 rubber wheels per year for its dump truck series. The firm makes its own wheels, which it can produce at a rate of 12,000 per day. The toy trucks are assembled uniformly over the entire year. Carrying costs is $2 per wheel a year. Setup cost for a production run of wheels is $75. The firm operates 240 days per year. D = 100,000 wheels/year S = $75 H = $2 per wheel/year p = 12,000 wheels/day u = 100,000 wheels per 240 days or 417 wheels/day 1 3 7 15
Neptune Company has developed a small inflatable toy that it is anxious to introduce to its customers. The company’s Marketing Department estimates that demand for the new toy will range between 20,000 units and 30,000 units per month. The new toy will sell for $10.00 per unit. Enough capacity exists in the company’s plant to produce 25,000 units of the toy each month. Variable expenses to manufacture and sell one unit would be $6.00 , and incremental fixed expenses associated with the toy would total $32,000 per month. Neptune has also identified an outside supplier who could produce the toy for a price of $5.00 per unit plus a fixed fee of $69,000 per month for any production volume up to 25,000 units. For a production volume between 25,001 and 55,000 units the fixed fee would increase to a total of $138,000 per month. Required: 1. Calculate the break-even point in unit sales assuming that Neptune does not hire the outside supplier. 2. How much profit with Neptune earn…
I need answers to question 4 and 5. Please make it very clear. Neptune Company has developed a small inflatable toy that it is anxious to introduce to its customers. The company’s Marketing Department estimates that demand for the new toy will range between 10,000 units and 35,000 units per month. The new toy will sell for $9.00 per unit. Enough capacity exists in the company’s plant to produce 15,000 units of the toy each month. Variable expenses to manufacture and sell one unit would be $5.00 , and incremental fixed expenses associated with the toy would total $32,000 per month. Neptune has also identified an outside supplier who could produce the toy for a price of $4.00 per unit plus a fixed fee of $29,000 per month for any production volume up to 15,000 units. For a production volume between 15,001 and 35,000 units the fixed fee would increase to a total of $58,000 per month. Required: 1. Calculate the break-even point in unit sales assuming that Neptune does not hire the…
Kerrigan Lumber Yard receives 12,000 large trees each year that they process into rough logs. Currently, Kerrigan sells the rough logs for $75 each. Kerrigan is considering processing the logs further into refined lumber. Each log can be processed into 200 feet of refined lumber at an additional cost of $0.40 per foot. The refined lumber can be sold for $0.95 per foot. Assume that the cost of getting the 12,000 large trees falls by half. Should Kerrigan sell the rough logs at split-off or process it further? Process further, the reduction in the cost of trees makes that option more profitable than it was before. Sell at split-off because the decrease in the cost of the trees makes that option more profitable than it was before. Sell at split-off, the reduction in the cost of the trees is irrelevant. Process further, the reduction in the cost of the trees will lower further processing costs. Process further because the reduction in the cost of the trees is irrelevant
InteliSystems needs 79,000 optical switches next year . By outsourcing them, InteliSystems can use its idle facilities to manufacture another product that will contribute $140,000 to operating income, but none of the fixed costs will be avoidable. Should InteliSystems make or buy the switches? Show your analysis based on the information in the table below for making 70,000 switches.
Neptune Company has developed a small inflatable toy that it is anxious to introduce to its customers. The company’s Marketing Department estimates that demand for the new toy will range between 20,000 units and 30,000 units per month. The new toy will sell for $9.00 per unit. Enough capacity exists in the company’s plant to produce 25,000 units of the toy each month. Variable expenses to manufacture and sell one unit would be $5.00 , and incremental fixed expenses associated with the toy would total $32,000 per month. Neptune has also identified an outside supplier who could produce the toy for a price of $4.00 per unit plus a fixed fee of $69,000 per month for any production volume up to 25,000 units. For a production volume between 25,001 and 55,000 units the fixed fee would increase to a total of $138,000 per month. Required: Calculate the break-even point in unit sales assuming that Neptune does not hire the outside supplier. Note: Do not round your intermediate calculations.…
Neptune Company produces toys and other items for use in beach and resort areas. A small, inflatable toy has come onto the market that the company is anxious to produce and sell. The new toy will sell for $3 per unit. Enough capacity exists in the company’s plant to produce 16,000 units of the toy each month. Variable expenses to manufacture and sell one unit would be $1.25, and fixed expenses associated with the toy would total $35,000 per month. The company’s Marketing Department predicts that demand for the new toy will exceed the 16,000 units that the company is able to produce. Additional manufacturing space can be rented from another company at a fixed expense of $1,000 per month. Variable expenses in the rented facility would total $1.40 per unit, due to somewhat less efficient operations than in the main plant. Required: 1. What is the monthly break-even point for the new toy in unit sales and dollar sales. 2. How many units must be sold each month to attain a target profit of…
Venus Robotics can produce 25,000 robots a year on its daytime shift. The fixed manufacturing costs per year are $2.3 million and the total labor cost is $9.5 million. To increase its production to 50,000 robots per year, Venus is considering adding a second shift. The unit labor cost for the second shift would be 15% higher than the day shift, but the total fixed manufacturing costs would increase only to $2.8 million from $2.3 million. (a) Compute the unit manufacturing cost for the daytime shift. (b) Would adding a second shift increase or decrease the unit manufacturing cost at the plant?
Neptune Company produces toys and other items for use in beach and resort areas. A small, inflatable toyhas come onto the market that the company is anxious to produce and sell. The new toy will sell for $3 perunit. Enough capacity exists in the company’s plant to produce 16,000 units of the toy each month. Variable costs to manufacture and sell one unit would be $1.25, and fixed costs associated with the toy wouldtotal $35,000 per month.The company’s Marketing Department predicts that demand for the new toy will exceed the 16,000units that the company is able to produce. Additional manufacturing space can be rented from anothercompany at a fixed cost of $1,000 per month. Variable costs in the rented facility would total $1.40 perunit, due to somewhat less efficient operations than in the main plant.Required:1. Compute the monthly break-even point for the new toy in units and in total sales dollars. Show allcomputations.2. How many units must be sold each month to make a monthly profit…

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