Cuhk Acct 3121 Essay

1623 Words Jan 11th, 2016 7 Pages
19-31 (25–30 min.) Waiting times, manufacturing cycle times. 1a. Average waiting time for an order of Z39

1b. = + = 160 hours + 80 hours = 240 hours per order 2a. Average waiting time for Z39 and Y28

2b.

= + = 330 hours + 80 hours = 410 hours = + = 330 hours + 20 hours = 350 hours 19-32 (60 min.) Waiting times, relevant revenues, and relevant costs
(continuation of 19-31). Selling price per order of Y28, which has an average manufacturing lead time of more than 320 hours $ 6,000 Variable cost
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carrying costs 17,562.50e 9,000.00f 8,562.50 Expected total costs 892,562.50 759,000.00 133,562.50 Expected revenues minus expected costs $ 582,437.50 $ 591,000.00 $ (8562.50) a (50 × $26,500) + (25 × $6,000) b 50 × $27,000 c (50 × $15,000) + (25 × $5,000) d 50 × $15,000 e (50 × $0.75 × 410) + (25 × $0.25 × 350) f 50 × $0.75 × 240

23-28 (40–50 min.) ROI performance measures based on historical cost and current cost.

1. ROI using historical cost measures: Passion Fruit $ 480,000 ÷ $ 965,000 = 49.74% Kiwi Fruit $ 575,000 ÷ $2,175,000 = 26.44% Mango Fruit $1,210,000 ÷ $3,890,000 = 31.11% The Passion Fruit Division appears to be considerably more efficient than the Kiwi Fruit and Mango Fruit Divisions. 2. The gross book values (i.e., the original costs of the plants) under historical cost are calculated as the useful life of each plant (12 years)  the annual depreciation: Passion Fruit 12  $270,000 = $3,240,000 Kiwi Fruit 12  $175,000 = $2,100,000

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