Newbury Printers operates a printing press with a monthly capacity of 3,200 machine-hours. Newbury has two...

 

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Newbury Printers operates a printing press with a monthly capacity of 3,200 machine-hours. Newbury has two main customers: Wallace Corporation and Kimberly Corporation. Data on each customer for January are: (Click to view the data.) 2(Click the icon to view the special order information.) Read the requirements. Begin by calculating the amount that should be used to determine the allocation. N Wallace Corporation Kimberly Corporation (1) Since the (2)- of Wallace, to maximize operating income Newbury should first allocate the capacity needed to of Kimberly is (3). than the (4) take all of the (5) Corporation business and then allocate the remaining to (6) Corporation. Now calculate the operating income using the allocation you determined above. Wallace Corporation Kimberly Corporation Total (7) x Machine-hours to be worked Now calculate the operating income using the allocation you determined above. Total Wallace Corporation Kimberly Corporation (7) x Machine-hours to be worked (8) (9) Operating income What other factors should Newbury consider before making a decision? (Select all that apply.) OA. Newbury's managers need to consider long-run effects of their decision and then decide whether it should accept one company's business at the cost of the other. O B. Choosing customers is a strategic decision that should primarily involve the analysis of the short-term effects of making a decision. OC. If Newbury sees long-run benefit in working with the company that provides the least profit, then Newbury must also look for ways to increase the profitability of the business it does with that company. OD. If Newbury sees long-run benefit in working with the company that provides the oreatest profit then Newbury does not need to be .concerned about turning down tho What other factors should Newbury consider before making a decision? (Select all that apply.) O A. Newbury's managers need to consider long-run effects of their decision and then decide whether it should accept one company's business at the cost of the other. B. Choosing customers is a strategic decision that should primarily involve the analysis of the short-term effects of making a decision. O C. If Newbury sees long-run benefit in working with the company that provides the least profit, then Newbury must also look for ways to increase the profitability of the business it does with that company. O D. If Newbury sees long-run benefit in working with the company that provides the greatest profit, then Newbury does not need to be concerned about turning down the business of the other company. OE. Will both corporations continue to demand the same level of business going forward? OF. Will turning down the business of one company affect customer satisfaction? G. If Newbury turns down one of the company's business, will that company continue to place orders with Newbury or seek alternative suppliers? 1: Data Table Kimberly Corporation Wallace Corporation Total Revenues 240,000 S 160,000 $ 400,000 Variable costs 129,600 112,000 241,600 Contribution margin 110,400 48,000 158,400 Fixed costs (allocated) 75,000 50,000 125,000 35,400 $ (2,000) $ 33,400 Operating income Machine-hours required 2,400 hours 800 hours 3,200 hours 2 More Info Kimberly Corporation indicates that it wants Newbury to do an additional $160,000 worth of printing jobs during February. These jobs are identical to the existing business Newbury did for Kimberly in January in terms of variable costs and machine-hours required. Newbury anticipates that the business from Wallace Corporation in February will be the same as that in January. Newbury can choose to accept as much of the Wallace and Kimberly business for February as its capacity allows. Assume that total machine-hours and fixed costs for February will be the same as in January. Newbury Printers operates a printing press with a monthly capacity of 3,200 machine-hours. Newbury has two main customers: Wallace Corporation and Kimberly Corporation. Data on each customer for January are: (Click to view the data.) 2(Click the icon to view the special order information.) Read the requirements. Begin by calculating the amount that should be used to determine the allocation. N Wallace Corporation Kimberly Corporation (1) Since the (2)- of Wallace, to maximize operating income Newbury should first allocate the capacity needed to of Kimberly is (3). than the (4) take all of the (5) Corporation business and then allocate the remaining to (6) Corporation. Now calculate the operating income using the allocation you determined above. Wallace Corporation Kimberly Corporation Total (7) x Machine-hours to be worked Now calculate the operating income using the allocation you determined above. Total Wallace Corporation Kimberly Corporation (7) x Machine-hours to be worked (8) (9) Operating income What other factors should Newbury consider before making a decision? (Select all that apply.) OA. Newbury's managers need to consider long-run effects of their decision and then decide whether it should accept one company's business at the cost of the other. O B. Choosing customers is a strategic decision that should primarily involve the analysis of the short-term effects of making a decision. OC. If Newbury sees long-run benefit in working with the company that provides the least profit, then Newbury must also look for ways to increase the profitability of the business it does with that company. OD. If Newbury sees long-run benefit in working with the company that provides the oreatest profit then Newbury does not need to be .concerned about turning down tho What other factors should Newbury consider before making a decision? (Select all that apply.) O A. Newbury's managers need to consider long-run effects of their decision and then decide whether it should accept one company's business at the cost of the other. B. Choosing customers is a strategic decision that should primarily involve the analysis of the short-term effects of making a decision. O C. If Newbury sees long-run benefit in working with the company that provides the least profit, then Newbury must also look for ways to increase the profitability of the business it does with that company. O D. If Newbury sees long-run benefit in working with the company that provides the greatest profit, then Newbury does not need to be concerned about turning down the business of the other company. OE. Will both corporations continue to demand the same level of business going forward? OF. Will turning down the business of one company affect customer satisfaction? G. If Newbury turns down one of the company's business, will that company continue to place orders with Newbury or seek alternative suppliers? 1: Data Table Kimberly Corporation Wallace Corporation Total Revenues 240,000 S 160,000 $ 400,000 Variable costs 129,600 112,000 241,600 Contribution margin 110,400 48,000 158,400 Fixed costs (allocated) 75,000 50,000 125,000 35,400 $ (2,000) $ 33,400 Operating income Machine-hours required 2,400 hours 800 hours 3,200 hours 2 More Info Kimberly Corporation indicates that it wants Newbury to do an additional $160,000 worth of printing jobs during February. These jobs are identical to the existing business Newbury did for Kimberly in January in terms of variable costs and machine-hours required. Newbury anticipates that the business from Wallace Corporation in February will be the same as that in January. Newbury can choose to accept as much of the Wallace and Kimberly business for February as its capacity allows. Assume that total machine-hours and fixed costs for February will be the same as in January.

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Answer The following table shows the contribution earned by Newbury Printers on printing jobs from P... View the full answer