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Hat Tricks Company (HTC) is a Buffalo, New York, manufacturer of hats and gloves. Recently, the company purchased a new machine to aid in producing
Hat Tricks Company (HTC) is a Buffalo, New York, manufacturer of hats and gloves. Recently, the company purchased a new machine to aid in producing the hat product lines. Production efficiency on the new machine increases with the workforce experience. It has been shown that as cumulative output on the new machine increases, average labor time per unit decreases up to the production of at least 3,200 units. As HTC's cumulative output doubles from a base of 100 units produced, the cumulative average labor time per unit declines by a learning rate of 80%. HTC has developed a new style of men's hat to be produced on the new machine. One hundred of these hats can be produced in a total of 20 labor hours. All other direct costs to produce each hat are $16 per hat, excluding direct labor cost. Direct labor cost per hour is $45. Fixed costs are $8,000 per month, and HTC has the capacity to produce 3,200 hats per month. Required: HTC plans to set the selling price for the new men's hat at 200% of direct production cost. If the company is planning to sell 100 hats, what is the selling price? If the plan is to sell 800 hats, what should be the selling price? (Do not round intermediate calculations. Round your answers to 2 decimal places.) United States Motors Incorporated (USMI) manufactures automobiles and light trucks and distributes them for sale to consumers through franchised retail outlets. As part of the franchise agreement, dealerships must provide monthly financial statements following the USMI accounting procedures manual. USMI has developed the following financial profile of an average dealership that sells 2,100 new vehicles annually: USMI is considering a major expansion of its dealership network. The vice president of marketing has asked Jack Snyder, corporate controller, to develop some measure of the risk associated with the addition of these franchises. Jack estimates that 90% of the mixed costs shown are variable for purposes of this analysis. He also suggests performing regression analyses on the various components of the mixed costs to more definitively determine their variability. Required: 1. Calculate the composite dealership profit if 2,900 units are sold. 3. The regression equation that Jack Snyder developed to project annual sales of a dealership has an R-squared of 60% and a standard error of the estimate of $6,300,000. If the projected annual sales for a dealership total $39,900,000, determine the approximate 95% confidence interval for Jack's prediction of sales. (Hint: The 95% confidence interval uses 2 standard errors in determining the interval.) Complete this question by entering your answers in the tabs below. The regression equation that Jack Snyder developed to project annual sales of a dealership has an R-squared of 60% and a
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