Questions from Cost Management

Q: Bienestar, Inc., implemented cellular manufacturing as recommended by a consultant

Bienestar, Inc., implemented cellular manufacturing as recommended by a consultant. The production f low improved dramatically. However, the company was still faced with the competitive need to improv...

Q: Henderson, Inc., has just created five order fulfillment value streams

Henderson, Inc., has just created five order fulfillment value streams, two focused and three that produce multiple products. The size of the plant in which the value streams are located is 100,000 sq...

Q: A value stream has three activities and two products. The units

A value stream has three activities and two products. The units produced and shipped per week are 50 of the deluxe model (Model A) and 200 of the basic model (Model B). The cycle time for Model A is f...

Q: Davis Company produces two hair dryers: regular and deluxe. The

Davis Company produces two hair dryers: regular and deluxe. The company has four activities: machining, engineering, receiving, and inspection. Information on these activities and their drivers is giv...

Q: Schylar Pharmaceuticals, Inc., plans to sell 130,000 units

Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of $22 each in the coming year. Total variable costs equal $1,086,800. Total fixed costs equal $8,000,000....

Q: Reagan, Inc., has developed a chew-proof dog bed

Reagan, Inc., has developed a chew-proof dog bed—the Tuff-Pup. Fixed costs are $204,400 per year. The average price for the Tuff-Pup is $36, and the average variable cost is $22 per unit. Currently, R...

Q: Jonah Graham owns and operates The Green Thumb Company (GTC),

Jonah Graham owns and operates The Green Thumb Company (GTC), which provides live plants and f lower arrangements to professional offices. Jonah has fixed costs of $3,240 per month for office/greenhou...

Q: Big Red Motors, Inc., employs 15 sales personnel to market

Big Red Motors, Inc., employs 15 sales personnel to market its line of luxury automobiles. The average car sells for $75,000, and a 6 percent commission is paid to the salesperson. Big Red Motors is c...

Q: Sports-Reps, Inc., represents professional athletes and movie and

Sports-Reps, Inc., represents professional athletes and movie and television stars. The agency had revenue of $12,345,000 last year, with total variable costs of $5,678,700 and fixed costs of $2,192,4...

Q: Campbell Company manufactures and sells adjustable canopies that attach to motor homes

Campbell Company manufactures and sells adjustable canopies that attach to motor homes and trailers. The market covers both new unit purchases as well as replacement canopies. Campbell developed its b...