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MaxiDrive manufactures a wide variety of parts for recreational boating, including a gear and driveshaft part for high-powered outboard boat engines. Original equipment manufacturers such as Mercury and Honda purchase the components for use in large, powerful outboards. The part sells for $630, and sales volume averages 26,500 units per year. Recently, MaxiDrive's major competitor reduced the price of its equivalent unit to $559. The market is very competitive, and MaxiDrive realizes it must meet the new price or lose significant market share. Management has begun paying closer attention to costs and has reconfirmed the current existing standard costs. The controller then assembled the following cost and usage data for the most recent year for MaxiDrive's production of 26,500 units: Budgeted Actual Quantity Budgeted Cost Quantity Actual Cost Direct materials $ 6, 650, 000 $ 7, 150, 000 Direct labor 2, 565, 000 2 , 700, 000 Indirect labor 2, 560, 000 2, 475, 000 Inspection (hours and cost) 980 330 , 000 1, 150 365 , 000 Materials handling (number of purchases and cost) 3,950 575 , 000 3, 600 560 , 000 Machine setups (number and cost) 1 , 550 825 , 000 1, 650 800 , 000 Returns and rework (number of times and cost) 330 95, 000 530 145, 000 $ 13, 600, 000 $ 14, 195, 000 Required: 1. Calculate the target cost for maintaining current market share and profitability. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Target cost NextTake-a-Break Travel Company offers spring break travel packages to college students. Two of its packages, a 7-day, 6-night trip to Cancun and a 5-day, 4-night trip to Jamaica, have the following characteristics: Package Specifications Cancun Jamaica Cost Data Oceanfront room; number of nights 6 4 $75ight Meals : Breakfasts $11/ea Lunches $16/ea Dinners $26/ea HNNAUD Scuba diving trips $94/ea Water skiing trips $69/ea Airfare (round trip from Miami) $365 (Cancun) , $490 (Jamaica) Transportation to and from airport 1 1 $42 (Cancun) , $66 (Jamaica) The Cancun trip sells for $2,120, and the Jamaica trip sells for $1,880, and both packages allow two bags to be checked for free. Required: 1. What are the current profit margins on both trips? 2. Take-a-Break's management believes that it must drop the price of each trip by $119 in order to remain competitive in the market. Recalculate profit margins for both packages at these price levels. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What are the current profit margins on both trips? ( Round percentage answers to 1 decimal place (i.e. .123 = 12.3%).) Cancun Jamaica Profit margin Profit margin (%) % % Required 1 Required 2 > Mc Graw HillJohnson Electronics manufactures a power supply used in a variety of electronics products, including printers, modems, and routers. The demand for the part is 7,700 units per week. The production of the power supply requires six different manufacturing operations, each in sequence and each having the following processing times. The net available time to work is 48 hours per week, using two shifts. Processing Operation Time (seconds) Operation 1 18 Operation 2 15 Operation 3 22 Operation 4 17 Operation 5 25 Operation 6 21 Required: 1. What is the Takt time, in seconds, for this product? (Round your final answer to the nearest whole number.) Takt time seconds per unit 2. Is the processing line properly balanced for this product? O Yes O No Mc Required information [The following information applies to the questions displayed below.] UR Safe Systems installs home security systems. Two of its systems, the ICU 100 and the ICU 900, have these characteristics: Design Specifications ICU 100 ICU 900 Cost Data Video cameras 1 $ 105/ea Video monitors $ 45/ ea Aww w Motion detectors $ 10/ea Floodlights $ 4/ea Alarms 3 $ 10/ea Wiring 680 feet 1, 080 feet $ 0.1/feet Installation 14 hour 24 hour $ 10/hour The ICU 100 sells for $830 installed, and the ICU 900 sells for $1,540 installed. Required: 1. What are the current gross profit margin percentages on both systems? 2. UR Safe's management believes that it must drop the price on the ICU 100 to $770 and on the ICU 900 to $1,410 to remain competitive in the market. Recalculate gross profit margin percentages for both products at these price levels and then compute the target cost needed for each product to maintain the current gross profit margin percentages. (For all requirements, round your percentage answers to 2 decimal places (i.e. .1234 = 12.34%) and other answers to the nearest whole dollar amount.) ICU 100 ICU 900 1 . |Current profit margin % % 2 . Profit margin Target cost Prev 4 of 5 Next >nt #9 (Chapter 13) i Saved Caldwell Supply, a wholesaler, has determined that its operations have three primary activities: purchasing, warehousing, and distributing. The firm reports the following operating data for the year just completed: Quantity of Cost Activity Cost Driver Driver Cost per Unit of Cost Driver Purchasing Number of purchase orders 1, 110 $161 per order Warehousing Number of moves 8, 000 30 per move Distributing Number of shipments 610 91 per shipment Caldwell buys 101,100 units at an average unit cost of $10 and sells them at an average unit price of $20. The firm also has fixed operating costs of $251,100 for the year. Caldwell's customers are demanding a 10% discount for the coming year. The company expects to sell the same amount if the demand for price reduction can be met. Caldwell's suppliers, however, are willing to give only a 2% discount. Required: Caldwell has estimated that it can reduce the number of purchase orders to 790 and can decrease the cost of each shipment by $14 with minor changes in its operations. Any further cost savings must come from reengineering the warehousing processes. What is the maximum cost (i.e., target cost) for warehousing if the firm desires to earn the same amount of profit next year? Maximum cost