These questions relate to the Integrated Analytics Case: Bene Petit. Select the appropriate eBook link to...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
These questions relate to the Integrated Analytics Case: Bene Petit. Select the appropriate eBook link to open the Case Overview, Case Background, and Part 3: Managerial Decision Making. The following table summarizes the operating results for Bene Petit's first year of operations: Bene Petit First Year Operating Data: Single (1 serving) Dual (2 servings) Family (4 Total servings) 3,000 5,000 12,000 20,000 3,000 10,000 48,000 61,000 750 1,250 3,000 5,000 3,000 5,000 12,000 20,000 6 10 24 40 Customer Meals Sold Total Customer Servings Customer Orders (Average = 4 meals per order) Number of Donated Meals (1 per customer meal) Number of Donated Deliveries (500 meals per delivery) Additional information about selling prices, variable costs, and fixed costs is summarized below: The average sales price for customer meals is $5 per serving. The average direct materials (ingredients) cost of customer meals is $1 per serving. Direct labor costs average $0.75 per customer meal. Variable manufacturing overhead costs are applied at a rate equal to 60% of direct labor. The delivery expense for customer meals is $2 per customer order. The incremental cost of producing the donated meals is $1.25 per meal. The delivery expense for donated meals is $125 per delivery to community partners. The following fixed costs are allocated to customer meals based on total sales revenue: Fixed manufacturing overhead costs are $75,000 per year. Fixed selling expenses are $29,000 per year. 9. Bene Petit is currently paying employees to deliver the meal boxes to customers' doorsteps using a small fleet of delivery trucks. As the business expands, Taylor is trying to decide whether she should outsource to a private delivery company such as FedEx or UPS. The following additional details are available: Variable delivery expenses for fuel and driver wages are $2 per customer order. Fixed delivery expenses for insurance and maintenance on delivery trucks are currently $12,000 per year. To expand delivery capacity beyond 7,500 deliveries per year, Bene Petit would need to invest in additional delivery trucks, which would increase fixed delivery expenses to $30,000 per year. This would provide the capacity to make up to 15,000 deliveries per year. The contract rate for third party logistics providers such as UPS and FedEx is $5 per delivery. Use the Tableau dashboard below to answer the questions. ! Required information Cost Insource $70K $60K $50K $40K $30K $20K $10K $OK | 1K 2K $10K $9K Outsource 34 3K 4K 5K SE HE 6K 7K 8K 48 9K 10K 11K 12K 13K 14K 15K S < Prev 60 61 of 83 Next > a. At the current volume of 5,000 orders per year, what are the incremental savings from insourcing or outsourcing? Incremental savings in favor of insourcing b. If Bene Petit expects demand to stabilize at about 8,000 orders per year, what will the incremental savings from insourcing or outsourcing be? Incremental savings in favor of outsourcing Required information 10 c. If Bene Petit expects demand to increase beyond 8,000 orders per year, at what point will they be indifferent toward insourcing versus outsourcing? Indifferent point orders ok ht ences d. If Bene Petit expects to sell 13,000 orders per year, what will the incremental savings from insourcing or outsourcing be? Incremental savings $ 9,000 in favor of insourcing These questions relate to the Integrated Analytics Case: Bene Petit. Select the appropriate eBook link to open the Case Overview, Case Background, and Part 3: Managerial Decision Making. The following table summarizes the operating results for Bene Petit's first year of operations: Bene Petit First Year Operating Data: Single (1 serving) Dual (2 servings) Family (4 Total servings) 3,000 5,000 12,000 20,000 3,000 10,000 48,000 61,000 750 1,250 3,000 5,000 3,000 5,000 12,000 20,000 6 10 24 40 Customer Meals Sold Total Customer Servings Customer Orders (Average = 4 meals per order) Number of Donated Meals (1 per customer meal) Number of Donated Deliveries (500 meals per delivery) Additional information about selling prices, variable costs, and fixed costs is summarized below: The average sales price for customer meals is $5 per serving. The average direct materials (ingredients) cost of customer meals is $1 per serving. Direct labor costs average $0.75 per customer meal. Variable manufacturing overhead costs are applied at a rate equal to 60% of direct labor. The delivery expense for customer meals is $2 per customer order. The incremental cost of producing the donated meals is $1.25 per meal. The delivery expense for donated meals is $125 per delivery to community partners. The following fixed costs are allocated to customer meals based on total sales revenue: Fixed manufacturing overhead costs are $75,000 per year. Fixed selling expenses are $29,000 per year. 9. Bene Petit is currently paying employees to deliver the meal boxes to customers' doorsteps using a small fleet of delivery trucks. As the business expands, Taylor is trying to decide whether she should outsource to a private delivery company such as FedEx or UPS. The following additional details are available: Variable delivery expenses for fuel and driver wages are $2 per customer order. Fixed delivery expenses for insurance and maintenance on delivery trucks are currently $12,000 per year. To expand delivery capacity beyond 7,500 deliveries per year, Bene Petit would need to invest in additional delivery trucks, which would increase fixed delivery expenses to $30,000 per year. This would provide the capacity to make up to 15,000 deliveries per year. The contract rate for third party logistics providers such as UPS and FedEx is $5 per delivery. Use the Tableau dashboard below to answer the questions. ! Required information Cost Insource $70K $60K $50K $40K $30K $20K $10K $OK | 1K 2K $10K $9K Outsource 34 3K 4K 5K SE HE 6K 7K 8K 48 9K 10K 11K 12K 13K 14K 15K S < Prev 60 61 of 83 Next > a. At the current volume of 5,000 orders per year, what are the incremental savings from insourcing or outsourcing? Incremental savings in favor of insourcing b. If Bene Petit expects demand to stabilize at about 8,000 orders per year, what will the incremental savings from insourcing or outsourcing be? Incremental savings in favor of outsourcing Required information 10 c. If Bene Petit expects demand to increase beyond 8,000 orders per year, at what point will they be indifferent toward insourcing versus outsourcing? Indifferent point orders ok ht ences d. If Bene Petit expects to sell 13,000 orders per year, what will the incremental savings from insourcing or outsourcing be? Incremental savings $ 9,000 in favor of insourcing
Expert Answer:
Answer rating: 100% (QA)
a At the current volume of 5000 orders per year lets calculate the incremental savings from insourci... View the full answer
Related Book For
Auditing and Assurance services an integrated approach
ISBN: 978-0133125689
15th edition
Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley
Posted Date:
Students also viewed these accounting questions
-
Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face value of $1000, and a coupon rate of 7% (annual payments). The yield to maturity on this bond...
-
Identify each salt as neutral, acidic, or basic. a. KC2H3O2 b. KHSO4 c. KClO3
-
What was discussed by Diamond and Mosbacher, an oil-to-cash strategy can reduce violent conflict by liquidating resources more quickly can help states overcome a lack of industry to finish and export...
-
What is the intertemporal substitution hypothesis? Does this argument provide a convincing account of the cyclical trend in the unemployment rate?
-
A 1500-kg rocket is to be launched with an initial upward speed of 50.0 m/s. In order to assist its engines, the engineers will start it from rest on a ramp that rises 53° above the horizontal...
-
Suppose you want to raise the temperature of a mass m of ice from T 0 < 0 C to T > 100 C. In this problem, represent the heat of fusion as L f , the heat of vaporization as L v , and the temperatures...
-
The Shortest Job First (SJF) and the Shortest Remaining-Time First (SRTF) requires the computation of the next CPU "burst length" for each process. i) What are the variables required to compute the...
-
Explain put-call parity.
-
Explain how you can use put options to create portfolio insurance. How can you create portfolio insurance using call options?
-
How does an understanding of the accounting equation facilitate the preparation of financial reports?
-
John bought 1,000 shares of Intel stock on October 18, 2015, for $30 per share plus a $750 commission he paid to his broker. On December 12, 2019, he sells the shares for $42.50 per share. He also...
-
Explain how debt can be viewed as an option portfolio.
-
1. Let A = {a, b, c} B = {b, d} C = {e, f, c} U = {a, b, c, d, e, f, g, h} 2. What is the probability of picking a king in a standard deck of 52 cards? 3. What?s the next number? -1, 2, 1, 3, 4, 7,...
-
Write the general quadratic equation y2 - 8y - 4x + 28 = 0 in standard form. Determine the vertex, focus, and directrix of the parabola defined by this equation. Sketch a graph.
-
Can you name five types of channels of communication?
-
How would you define your own leadership style? Do you have examples you can share with others on how you lead when called on?
-
Revisit the definition of strategic communication and then review the vignette at the beginning of the chapter. Match the different terms in the definition to the different entities in the vignette.
Study smarter with the SolutionInn App