P19-31 (similar to) Question Help The Tristan Corporation sells 300,000 V262 valves to the automobile and truck industry. Tristan has a capacity of 130,000 machine-hours and can produce three valves per machine-hour. V262's contribution margin per unit is $8. Tristan sells only 300,000 valves because 90,000 valves (30% of the good valves) need to be reworked. It takes one machine-hour to rework three valves, so 30,000 hours of capacity are used in the rework process. Tristan's rework costs are $990,000. Rework costs consist of the following: Click the icon to view the rework costs.) (Click the icon to view additional information.) Read the requirements. i More Info Direct materials and direct rework labor (variable costs): $5 per unit Fixed costs of equipment, rent, and overhead allocation: $6 per unit Print | Done Mawathe remark costs O More Info Tristan's process designers have developed a modification that would maintain the speed of the process and ensure 100% quality and no rework. The new process would cost $1,152,000 per year. The following additional information is available: Fixed costs of equipment, rent, and overhead allocation: $6 per unit The demand for Tristan's V262 valves is 450,000 per year. The Colton Corporation has asked Tristan to supply 25,000 T971 valves (another product) if Tristan implements the new design. The contribution margin per T971 valve is $11. Tristan can make one T971 valve per machine-hour with 100% quality and no rework. Requirements 1. Suppose Tristan's designers implement the new design. Should Tristan accept Colton's order for 25,000 T971 valves? Show your calculations. 2. Should Tristan implement the new design? Show your calculations. 3. What nonfinancial and qualitative factors should Tristan consider in deciding whether to implement the new design? Print Done Done Requirement 1. Suppose Tristan's designers implement the new design. Should Tristan accept Colton's order for 25,000 T971 valves? Show your calculations Start by calculating the contribution margin per machine-hour for each product. Determine the formula, then enter the amounts to calculate each product's contribution margin per machine-hour. # CM per machine hour V262 T971 CM per unit Demand per year (units) Number of units per hour Rework costs P19-31 (similar to) Question Help The Tristan Corporation sells 300,000 V262 valves to the automobile and truck industry. Tristan has a capacity of 130,000 machine-hours and can produce three valves per machine-hour. V262's contribution margin per unit is $8. Tristan sells only 300,000 valves because 90,000 valves (30% of the good valves) need to be reworked. It takes one machine-hour to rework three valves, so 30,000 hours of capacity are used in the rework process. Tristan's rework costs are $990,000. Rework costs consist of the following: Click the icon to view the rework costs.) (Click the icon to view additional information.) Read the requirements. i More Info Direct materials and direct rework labor (variable costs): $5 per unit Fixed costs of equipment, rent, and overhead allocation: $6 per unit Print | Done Mawathe remark costs O More Info Tristan's process designers have developed a modification that would maintain the speed of the process and ensure 100% quality and no rework. The new process would cost $1,152,000 per year. The following additional information is available: Fixed costs of equipment, rent, and overhead allocation: $6 per unit The demand for Tristan's V262 valves is 450,000 per year. The Colton Corporation has asked Tristan to supply 25,000 T971 valves (another product) if Tristan implements the new design. The contribution margin per T971 valve is $11. Tristan can make one T971 valve per machine-hour with 100% quality and no rework. Requirements 1. Suppose Tristan's designers implement the new design. Should Tristan accept Colton's order for 25,000 T971 valves? Show your calculations. 2. Should Tristan implement the new design? Show your calculations. 3. What nonfinancial and qualitative factors should Tristan consider in deciding whether to implement the new design? Print Done Done Requirement 1. Suppose Tristan's designers implement the new design. Should Tristan accept Colton's order for 25,000 T971 valves? Show your calculations Start by calculating the contribution margin per machine-hour for each product. Determine the formula, then enter the amounts to calculate each product's contribution margin per machine-hour. # CM per machine hour V262 T971 CM per unit Demand per year (units) Number of units per hour Rework costs
