4) Assume that Chandler considers the production of the pool shades and trellises to be a...

 

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4) Assume that Chandler considers the production of the pool shades and trellises to be a short-term decision. there is currently excess capacity in their processes, the company wants to evaluate the new products using a cash outlay approach. Compute the impact on Chandlers profits for each option. 4a) Compute the net change in cash of making and selling the full demand of pool shades. 4b) Compute the net change in cash of making and selling the full demand of trellises. 4c) Compute the net change in cash of making and selling the full demand of both pool shades and trellises. Resource Spending Approach a. Full demand b. Full demand c. Full demand Pool Shades Only 43,000.00 4,400.00 5.160.000.00 264.000.00 5,424,000.00 2,310,000.00 48,000.00 2,358,000.00 Product Line Unit sales price Incremental revenue Material Design/Drafting Engineering Fabrication. Powder coating Scheduling General factory Total cost Incremental Profit Trellises Only Both Products 4 5 6 7 8 9 10 11 12 14 16 17 PERFRAZ**RNARFR83: 18 19 20 21 22 24 25 20 27 29 30 31 32 33 34 Exhibit 1 Resource Design/Drafting Engineering Fabrication Powder coating Scheduling General factory Exhibit 2 Resource Design/Drafting Engineering Fabrication. Powder coating Scheduling General factory Selling price per unit Material cost per unit Existing Capacity Available and Used and Capacity Costs Current capacity and usage (annual) Purchased Cost of Capacity Cost Driver 22,000 design hours $ 550,000.00 15,000 engineering hr $750,000.00 40,000 parts $30,000.00 380,000 square feet $1,710,000.00 Practical Capacity 750 80,000 Resource needs for potential new products Pool shade Trellis requirements requirements Cost Driver design hours engineering hrs parts square feet job setups machine hrs Pool shade job setups $ 756,000.00 machine hrs $2,400,000.00 43,000,00 19,250.00 30 4 40 1600 1 80 Trellis 4,400.00 800.00 20 2 2219 170 10 Used Capacity 19,500. 14,750 39,000 210,000 640 64,000 Desired profit on sales Demand Pool shades Demand Trellises 0.30 120 60 4) Assume that Chandler considers the production of the pool shades and trellises to be a short-term decision. there is currently excess capacity in their processes, the company wants to evaluate the new products using a cash outlay approach. Compute the impact on Chandlers profits for each option. 4a) Compute the net change in cash of making and selling the full demand of pool shades. 4b) Compute the net change in cash of making and selling the full demand of trellises. 4c) Compute the net change in cash of making and selling the full demand of both pool shades and trellises. Resource Spending Approach a. Full demand b. Full demand c. Full demand Pool Shades Only 43,000.00 4,400.00 5.160.000.00 264.000.00 5,424,000.00 2,310,000.00 48,000.00 2,358,000.00 Product Line Unit sales price Incremental revenue Material Design/Drafting Engineering Fabrication. Powder coating Scheduling General factory Total cost Incremental Profit Trellises Only Both Products 4 5 6 7 8 9 10 11 12 14 16 17 PERFRAZ**RNARFR83: 18 19 20 21 22 24 25 20 27 29 30 31 32 33 34 Exhibit 1 Resource Design/Drafting Engineering Fabrication Powder coating Scheduling General factory Exhibit 2 Resource Design/Drafting Engineering Fabrication. Powder coating Scheduling General factory Selling price per unit Material cost per unit Existing Capacity Available and Used and Capacity Costs Current capacity and usage (annual) Purchased Cost of Capacity Cost Driver 22,000 design hours $ 550,000.00 15,000 engineering hr $750,000.00 40,000 parts $30,000.00 380,000 square feet $1,710,000.00 Practical Capacity 750 80,000 Resource needs for potential new products Pool shade Trellis requirements requirements Cost Driver design hours engineering hrs parts square feet job setups machine hrs Pool shade job setups $ 756,000.00 machine hrs $2,400,000.00 43,000,00 19,250.00 30 4 40 1600 1 80 Trellis 4,400.00 800.00 20 2 2219 170 10 Used Capacity 19,500. 14,750 39,000 210,000 640 64,000 Desired profit on sales Demand Pool shades Demand Trellises 0.30 120 60

Answer rating: 100% (QA)

Impact on Chandlers Profits Pool shades only full demand Incremental revenue43000 units 516 22152000... View the full answer