Spreadsheet Modeling & Decision Analysis: A Practical Introduction to Business Analytics (MindTap Course List)
8th Edition
ISBN: 9781305947412
Author: Cliff Ragsdale
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 4, Problem 1QP
Summary Introduction
To determine: The person who is right and justify the reason.
Expert Solution & Answer
Explanation of Solution
Given information:
Person H’s accountant argues that the AS requires 9 labor hours and the profit margin should be $144 less. Similarly, HL requires 6 labor hours and the profit margin should be $96 less.
Determine the person who is right and justify the reason:
According to the given information, the numbers of Person H is correct and the argument of Person H’s accountant is wrong. This is because, the
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
. The Newcoat Painting Company has for some time been experiencing high demand for its automobile repainting service. Because it has had to turn away business, management is concerned that the limited space available to store cars awaiting painting has cost them in lost revenue. A small vacant lot next to the painting facility has recently been made available for rental on a long-term basis at a cost of $10 per day. Management believes that each lost customer costs $20 in profit. Current demand is estimated to be 21 cars per day with exponential interarrival times (including those turned away), and the facility can service at an exponential rate of 24 cars per day. Cars are processed on a FCFS basis. Waiting space is now limited to 9 cars but can be increased to 20 cars with the lease of the vacant lot.Newcoat wants to determine whether the vacant lot should be leased. Management also wants to know the expected daily lost profit due to turning away customers if the lot is leased. Only…
A manager uses this equation to predict demand for landscaping services: Ft= 10 + 5t
Over the past eight periods, demand has been as follows:
Period, t: 1
Demand:
15
2
21
Period, t Tracking signal
1
2
3
4
5
6
7
8
3
23
30
5
32
6
38
42
Click here for the Excel Data File
Compute the tracking signals for Periods 1-8. (Negative values should be indicated by
a minus sign. Round your intermediate calculations and final answers to 3 decimal
places.)
8
47
On August, a light business bought $3600 worth of lamps. At the beginning of September, the store had $1400 in lights on hand, and by the end of September, it projected to have $1600 in lamps on hand to meet some of the forecasted October sales. And what's the August planned cost of goods sold?
Chapter 4 Solutions
Spreadsheet Modeling & Decision Analysis: A Practical Introduction to Business Analytics (MindTap Course List)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, management and related others by exploring similar questions and additional content below.Similar questions
- Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?arrow_forwardThe Tinkan Company produces one-pound cans for the Canadian salmon industry. Each year the salmon spawn during a 24-hour period and must be canned immediately. Tinkan has the following agreement with the salmon industry. The company can deliver as many cans as it chooses. Then the salmon are caught. For each can by which Tinkan falls short of the salmon industrys needs, the company pays the industry a 2 penalty. Cans cost Tinkan 1 to produce and are sold by Tinkan for 2 per can. If any cans are left over, they are returned to Tinkan and the company reimburses the industry 2 for each extra can. These extra cans are put in storage for next year. Each year a can is held in storage, a carrying cost equal to 20% of the cans production cost is incurred. It is well known that the number of salmon harvested during a year is strongly related to the number of salmon harvested the previous year. In fact, using past data, Tinkan estimates that the harvest size in year t, Ht (measured in the number of cans required), is related to the harvest size in the previous year, Ht1, by the equation Ht = Ht1et where et is normally distributed with mean 1.02 and standard deviation 0.10. Tinkan plans to use the following production strategy. For some value of x, it produces enough cans at the beginning of year t to bring its inventory up to x+Ht, where Ht is the predicted harvest size in year t. Then it delivers these cans to the salmon industry. For example, if it uses x = 100,000, the predicted harvest size is 500,000 cans, and 80,000 cans are already in inventory, then Tinkan produces and delivers 520,000 cans. Given that the harvest size for the previous year was 550,000 cans, use simulation to help Tinkan develop a production strategy that maximizes its expected profit over the next 20 years. Assume that the company begins year 1 with an initial inventory of 300,000 cans.arrow_forwardAt the beginning of each week, a machine is in one of four conditions: 1 = excellent; 2 = good; 3 = average; 4 = bad. The weekly revenue earned by a machine in state 1, 2, 3, or 4 is 100, 90, 50, or 10, respectively. After observing the condition of the machine at the beginning of the week, the company has the option, for a cost of 200, of instantaneously replacing the machine with an excellent machine. The quality of the machine deteriorates over time, as shown in the file P10 41.xlsx. Four maintenance policies are under consideration: Policy 1: Never replace a machine. Policy 2: Immediately replace a bad machine. Policy 3: Immediately replace a bad or average machine. Policy 4: Immediately replace a bad, average, or good machine. Simulate each of these policies for 50 weeks (using at least 250 iterations each) to determine the policy that maximizes expected weekly profit. Assume that the machine at the beginning of week 1 is excellent.arrow_forward
- Demand for stereo headphones and music players for joggers has caused Nina Industries to grow almost 50 percent over the past year. The number of joggers continues to expand, so Nina expects demand for headsets to also expand, because, as yet, no safety laws have been passed to prevent joggers from wearing them. Demand for the players for this year was as follows: MONTH DEMAND (UNITS) January 4,150 February 4,250 March 3,950 April 4,350 May 4,950 June 4,650 July 5,250 August 4,850 September 5,350 October 5,650 November 6,250 December 5,950 a. Using linear regression analysis, what would you estimate demand to be for each month next year? Using a spreadsheet, follow the general format in Exhibit 3.8. (Do not round intermediate calculations. Round your answers to 2 decimal places.) b. To be reasonably confident of meeting demand, Nina decides to use 3 standard errors of estimate for safety. How many additional units should be held to meet this…arrow_forwardCB Winter Sports specializes in providing ski lessons to beginners. The company uses the allowance method to account for uncollectible accounts expense CB Winter Sports experienced the following four accounting events in Year 1: 1. Recognized $266,000 of revenue on account. 2. Collected $126,000 cash from accounts receivable. 3. Wrote off uncollectible accounts of $2,300, 4. Recognized uncollectible accounts expense, CB Winter Sports estimated that uncollectible accounts expense will be 3 percent of sales on account Required: Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA) The first transaction is shown as an example. Note: Enter any decreases to account balances and cash…arrow_forwardColleen Company has gathered the following data pertaining to activities it performed for two of its major customers. Jerry, Inc. Kate Co. Number of orders 6 30 Units per order 1,000 420 Sales returns: Number of returns 4 5 Total units returned 50 140 Number of sales calls 13 5 Colleen sells its products at $290 per unit. The firm’s gross margin ratio is 20%. Both Jerry and Kate pay their accounts promptly and no accounts receivable is over 30 days. After using business analytics software to carefully analyze the operating data for the past 30 months, the firm has determined the following activity costs: Activity Cost Driver and Rate Sales calls $ 800 per visit Order processing 180 per order Deliveries 410 per order Sales returns 270 per return and $3 per unit returned Sales salary 107,000 per month Required: 1. Using customers as the cost objects, classify the activity costs…arrow_forward
- Chatham Automotive purchased new electric forklifts to move steel automobile parts two years ago. They cost $65,000 each, including the charging stand. In practice, it was found that they did not hold a charge as long as claimed by the manufacturer, so operating costs are very high. As a result, their current salvage value is about $9,000. Chatham is considering replacing them with propane models. New propane forklifts cost $58,000 each. After one year, they have a salvage value of $40,000, and thereafter decline in value at a declining-balance depreciation rate of 20 percent, as does the electric model from this time on. The MARR is 8 percent. Operating costs for the electric model will be $19,000 this year, rising by 12 percent per year. Operating costs for the propane model will initially be $11,000 over the first year, rising by 12 percent per year. Should Chatham Automotive replace the forklifts now? Find EAC for both propane and elctric forklifts. P.S. Show…arrow_forwardPendryl Office Supplies is evaluating the profitability of leasing a photocopier for its customers to use on a self serve basis at 10 cents/copy. The copier may be leased for $300 per month plus 1.5 cents per copy on a full service contract. Pendryl can purchase paper at $5 per 500 sheet ream. Toner costs $100 per bottle, which in normal use will last for 5000 pages. Pendryl thinks that there are additional other costs of 0.5 cents per copy. A. How many copies per month must be sold in order to break even? (6000 copies/month) B. What will be the increase in monthly profit for each 1000 copies sold above the break-even point? ($50 per month)arrow_forwardTRUE OR FALSE 1. With moderate participation level, customers work actively with the provider to co-produce the service 2. When demand and supply are balanced, firms will have idle capacity during low periods but have to turn away customers during peak periods.arrow_forward
- As manager of the St. Cloud Theatre Company, you have decided that concession sales will support themselves. The following table provides the information you have been able to put together thus far: Item Soft Drink Wine Coffee Candy Selling Price $1.00 $1.75 $1.50 $0.75 Variable Cost $0.70 $1.00 $0.35 $0.35 % of Revenue 24 25 29 22 Last year's manager, Scott Ellis, has advised you to be sure to add 10% of variable cost as a waste allowance for all categories. You estimate labor cost to be $250.00 (5 booths with 2 people each). Even if nothing is sold, your labor cost will be $250.00, so you decide to consider this a fixed cost. Booth rental, which is a contractual cost at $60.00 for each booth per night, is also a fixed cost. a) Based on the information available, the per night break-even point in dollars for the St. Cloud Theatre Company = $ (round your response to two decimal places). b) Based on the given information, the per night break-even point in servings for w servings (round…arrow_forwardAlma has decided to purchase a cell phone with Internetaccess and must choose a rate plan. The “occasional-user”plan is $0.50/minute, regardless of how many minutes ofair time are used. The “frequent-user” plan charges a flatrate of $55/month for 70 minutes of air time plus$0.33/minute for any time over 70 minutes. The “executive” plan charges a flat fee of $75 per month for 100minutes of air time plus $0.25/minute over 100 minutes. Inthe interest of simplicity, Alma has decided to go with theoccasional-user plan to start with and then upgrade as shesees fit at a later date.a. How much air time per month would Alma need touse before she upgrades from the occasional-user planto the frequent-user plan?b. At what usage rate should she switch from thefrequent-user plan to the executive plan?arrow_forwardAs manager of the St. Cloud Theatre Company, you have decided that concession sales will support themselves. The following table provides the information you have been able to put together thus far: Item Soft Drink Wine Coffee Candy Selling Price $1.00 $2.00 $1.00 $0.75 Variable Cost $0.65 $0.90 $0.30 $0.25 % of Revenue 25 24 31 20 Last year's manager, Scott Ellis, has advised you to be sure to add 10% of variable cost as a waste allowance for all categories. You estimate labor cost to be $300.00 (5 booths with 2 people each). Even if nothing is sold, your labor cost will be $300.00, so you decide to consider this a fixed cost. Booth rental, which is a contractual cost at $60.00 for each booth per night, is also a fixed cost. a) Based on the information available, the per night break-even point in dollars for the St. Cloud Theatre Company = $ 1138.92 (round your response to two decimal places). b) Based on the given information, the per night break-even point in servings for wine =…arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage Learning
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Purchasing and Supply Chain Management
Operations Management
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Cengage Learning