For Helen, one of the most exciting aspects of landing a full-time job was being able to buy a different car! Even though she will be working in an urban area, she will need a reliable vehicle to travel to client locations outside the city. Helen is trying to decide if she should buy a new vehicle or a slightly used vehicle, or lease a new(er) vehicle. She has had her eye on a dazzling blue SUV; it stares at her every time she drives by the lot. But she's not sure if she can justify its cost. Here are the costs and benefits she has gathered for each of these options: Buy New Buy Used Lease Midnight-Blue SUV Monthly payment $550 $380 Excellent for next 40,000 miles $310 plus $2 per mile if over 10,000 miles per year 2 years Excellent for length of lease Time frame 6 years 4 years Warranty Excellent for 100,000 miles only Full coverage insurance $210 per month $165 per month Operating cost $0.20 per mile $0.20 per mile Expected mileage per 13,800 13,800 year Safety features Maximum Moderate (a) Your answer is incorrect. $190 per month $0.20 per mile 13.800 Maximum Identify the relevant costs associated with each of Helen's three options. (Round answers to 2 decimal places, e.g. 15.25.) Total average monthly cost Buy New Buy Used Lease Midnight Blue SUV One of Carol's favorite things in the whole world is her grandma's banana bread. Carol has become so obsessed with this bread that she's using her grandma's recipe and making it for her friends. She and her friends have tweaked the recipe so that they can make delicious banana chocolate chip muffins and banana squares, too. They've turned this into a side business, selling their items to local convenience stores. There's one problem: the baked goods are best when well-ripened bananas are used. They're often available at a reduced price. But when they're not, Carol has to buy green bananas at full price and wait for them ripen. Here are the typical costs and selling prices for each product. Bread (per loaf) Muffin (per dozen) Squares (per dozen) Selling price $3.70 $5.40 $4.10 Variable costs 2.00 2.70 1.50 (a) Your answer is correct. Carol would love to bake these items seven days a week, but availability of ripe bananas is a constraint. The following quantities of ripe bananas are required for each of the products Carol makes: banana bread requires 1.25 pounds, muffins require 1.00 pound, and squares require 0.75 pounds. How much is the contribution margin per pound? (Round answers to 2 decimal places, e.g. 15.25.) Contribution margin per pound Bread 1.36 LA Which product maximizes her profitability, given the constrained resource? Squares maximize(s) her profitability. eTextbook and Media Muffins 2.7 LA Squares 3. Attempts: 1 of 3 used (b) (c) Your Answer Correct Answer Your answer is correct. The local convenience stores have told Carol that they can sell as many loaves of banana bread as she can supply, but they can only sell a combined 20 dozen muffins and squares. In a given production period, if Carol has 25 pounds of ripened bananas to work with, what quantities of each product should she make in order to maximize her profitability? (If no unit of an item is to be produced enter O. Do not leave any field blank.) Quantity eTextbook and Media Solution Bread Your answer is incorrect. Muffins Squares 8 loaves o dozen 20 dozen Attempts: 3 of 3 used Calculate Carol's total contribution margin if she produces and sells at the quantities specified in part (b). (Round answer to 2 decimal places, e.g. 15.25.) Total contribution margin $ Question 3 of 5 < > 0.5/1 One of the most popular phone accessory companies, Crane, has a reputation for unique designs for its phone cases. Its cases fit any version of all the prominent manufacturers' phones. The competition in this market is becoming fierce, with phone manufacturers spending big money on their own accessories. Crane is unsure if it should continue to manufacture the phone cases or outsource them to simplify operations. Manufacturing costs for Crane are as follows; these costs support one cycle of production that yields 1,100 phone cases: Costs per Cycle to Make DM DL $10,000 5,000 Variable-MOH 3,000 Fixed-MOH (total) 72,500 If Crane decides to purchase the cases, $58,270 of the fixed-MOH costs will be unavoidable. (a) Your answer is correct. At what price would Crane be indifferent about making its own phone cases versus buying from a supplier? (Round answer to 2 decimal places, e.g. 15.25.) Price $ 29.3 per case (c) Your answer is incorrect. If Crane could purchase similar quality phone cases from a supplier for $26 each, how much additional savings would it need to find in its fixed costs for this to be an equally attractive quantitative option? Additional savings $ eTextbook and Media Save for Later Attempts: 2 of 3 used Submit Answer