Here is the spreadsheet i did How should William respond to Mr. Fantastics call to Show me
Fantastic news! We've Found the answer you've been seeking!
Question:
Here is the spreadsheet i did
How should William respond to Mr. Fantastic’s call to “Show me the money!” in terms of options to reduce production costs over time to increase profitability?
If the estimate for projected production in August is adjusted down by 20% due to inclement weather, yet total labor and factory overhead costs remain at the original amounts, what is the impact on cost per equivalent unit?
At the selling price of US$97.00 per unit, what is gross profit for July if the packaging department adds US$0.04 to each unit and if units sold are 30,000 in June and 35,000 in July? Explain.
How successful was William in reducing unit costs after the first month?
Transcribed Image Text:
INTRODUCTION William Black is a creative, entrepreneurial individual who is constantly working on unique and innovative solutions to everyday problems and annoyances. He has developed several interesting products and even garnered a limited number of online sales. But none of his inventions has taken off-until now. William recently developed an electronic device, BallBoy, which locates golf balls above ground, in ground, and under water. The built-in technology is powerful enough to search for and detect balls within a radius of the length of a soccer field. BallBoy is a holster that holds smart phones of various sizes and models. It is activated once the short cable on the device is plugged into the phone. BallBoy gives walking directions to golf balls visually on the phone screen as well as via audio instructions. BallBoy is inexpensive to produce but, due to its unique design, is difficult to replicate. William is particularly pleased with BallBoy, realizing it is his best ideal yet. He has a patent pending to protect the functionality and use of his invention. William and his parents made and packaged 1,500 units of BallBoy in their garage and offered the product for sale online at US$99 per unit. William posted photos, videos, and information about BallBoy on his ecommerce website; the response was overwhelming. Within a week, orders exceeded 3,600 units. He shipped the available units and advised the remaining customers of the backorder. Customers posted rave reviews for quality, value, and functionality. William began hiring employees and expanded into his basement and backyard to scale the size of his operations. Orders continued to roll in at a pace he never imagined, and the team was barely able to keep up with the growing demand. William had neither the capacity nor the capital to further expand his production. He was denied loans at several banks due to his inexperience and unproven financial track record, and his family and friends did not have money to spare. The good news is he was contacted to appear on Spark Bank, a television show where entrepreneurs present new business ideas and products to five self-made billionaires who invest in small businesses they find appealing. On the show, the Spark Bank investors/judges were impressed with BallBoy and its potential to generate significant profit. Mike Peruvian and "Mr. Fantastic" showed genuine interest in William's business concept and offered a 10% equity stake in the business in exchange for funding to finance inventory and establish a production facility. Their one contingency was that after one year of operations, William must license the BallBoy technology to a major manufacturer, which they believe could use it for a different application. William was hesitant about sharing his trade secret, yet he agreed to the deal since he needed to money to proceed. Mike Peruvian wanted to be sure that William was well-versed in process costing as a cost allocation technique for identical items that are manufactured in a continuous sequence. He saw this as a test of William's ability to be a good product manager. He asked William to allocate anticipated production costs for both fully and partially completed units INTRODUCTION William Black is a creative, entrepreneurial individual who is constantly working on unique and innovative solutions to everyday problems and annoyances. He has developed several interesting products and even garnered a limited number of online sales. But none of his inventions has taken off-until now. William recently developed an electronic device, BallBoy, which locates golf balls above ground, in ground, and under water. The built-in technology is powerful enough to search for and detect balls within a radius of the length of a soccer field. BallBoy is a holster that holds smart phones of various sizes and models. It is activated once the short cable on the device is plugged into the phone. BallBoy gives walking directions to golf balls visually on the phone screen as well as via audio instructions. BallBoy is inexpensive to produce but, due to its unique design, is difficult to replicate. William is particularly pleased with BallBoy, realizing it is his best ideal yet. He has a patent pending to protect the functionality and use of his invention. William and his parents made and packaged 1,500 units of BallBoy in their garage and offered the product for sale online at US$99 per unit. William posted photos, videos, and information about BallBoy on his ecommerce website; the response was overwhelming. Within a week, orders exceeded 3,600 units. He shipped the available units and advised the remaining customers of the backorder. Customers posted rave reviews for quality, value, and functionality. William began hiring employees and expanded into his basement and backyard to scale the size of his operations. Orders continued to roll in at a pace he never imagined, and the team was barely able to keep up with the growing demand. William had neither the capacity nor the capital to further expand his production. He was denied loans at several banks due to his inexperience and unproven financial track record, and his family and friends did not have money to spare. The good news is he was contacted to appear on Spark Bank, a television show where entrepreneurs present new business ideas and products to five self-made billionaires who invest in small businesses they find appealing. On the show, the Spark Bank investors/judges were impressed with BallBoy and its potential to generate significant profit. Mike Peruvian and "Mr. Fantastic" showed genuine interest in William's business concept and offered a 10% equity stake in the business in exchange for funding to finance inventory and establish a production facility. Their one contingency was that after one year of operations, William must license the BallBoy technology to a major manufacturer, which they believe could use it for a different application. William was hesitant about sharing his trade secret, yet he agreed to the deal since he needed to money to proceed. Mike Peruvian wanted to be sure that William was well-versed in process costing as a cost allocation technique for identical items that are manufactured in a continuous sequence. He saw this as a test of William's ability to be a good product manager. He asked William to allocate anticipated production costs for both fully and partially completed units
Expert Answer:
Answer rating: 100% (QA)
William should respond to Mr Fantastics call of Show me the mone... View the full answer
Posted Date:
Students also viewed these accounting questions
-
In a job order cost system, direct labor and factory overhead applied are debited to individual jobs. How are these items treated in a process cost system and why? Discuss.
-
Explain how the cost per equivalent unit might be misleading to managers, particularly when a significant change in production is anticipated.
-
Cost per equivalent unit is $2 per EU for materials and $3 per EU for conversion. There are no transferred in costs and no spoilage. What is the cost of goods completed if 10,000 units are completed...
-
Player A has a $1 bill and a $20 bill, and player B has a $5 bill and a $10 bill. Each player will select a bill from the other player without knowing what bill the other player selected. If the...
-
Best-Cost Corp. issues 5 million shares of common stock and 100,000 shares of 6 percent cumulative preferred stock at $100 par. The corporation has not paid any dividend during the past three years....
-
As any credit-granting agency knows, there are always some customers who default on credit charges. Typically, customers are grouped into relatively homogeneous categories, so that customers within...
-
Consider the automobile gasoline mileage data in Table B.3. a. Build a linear regression model relating gasoline mileage \(y\) to engine displacement \(x_{1}\) and the type of transmission...
-
1. Prepare a service blueprint for the 100 Yen Sushi House operation. 2. What features of the 100 Yen Sushi House service delivery system differentiate it from the competition, and what competitive...
-
Sheffield Company purchased equipment on January 1, 2019, for $111,800 with an estimated salvage value of $31,200 and estimated useful life of 8 years. On January 1, 2021, Sheffield decided the...
-
Saint Leo is developing a plan to promote their new Center in your hometown. The University's marketing director wants to use a varied and balanced approach to IMC. For each of the five IMC types...
-
You are running a successful business. At this point you feel that you can add more value in the business by becoming a franchisor. How you think you can provide a supportive business model to your...
-
What are the key elements of a research work plan?
-
Explain the possible negative outcomes of sending routine messages that do not include audience benefits or wording that promotes goodwill.
-
How can proposal-writing software save you time and potentially improve a proposal?
-
What can you do to analyze your strengths and skills?
-
Why is the you perspective important for routine requests?
-
For same Bamboo Chop board (Hs code 4419.11)of USA Origin, butnow has a certificate of Origin and can claim UST PreferentialTariff - Value for Currency Conversion VFCC -> US$ 500 ExchangeRate. ( 0...
-
For the given transfer function: Vo(s) / Vi(s) = (s^2C^2R^2 + 1) / (s^2C^2R^2 + 4sCR + 1) Assumiing that 1/(CR) = 120 PI so write the matlab code to find the magnitude plot
-
Figure P3.8 shows the position curves for two carts, A and \(\mathrm{B}\), moving on parallel tracks along a horizontal surface. The instant when the two carts are at the same distance from their...
-
Suppose that the acceleration due to gravity near Earth's surface was cut in half (to about \(5 \mathrm{~m} / \mathrm{s}^{2}\) ). How would this affect the graphs shown in Figure 3. 6, assuming that...
-
Two cars are headed south on the highway at different speeds. Starting when the faster car pulls alongside the slower car, one of the cars accelerates northward for \(5.0 \mathrm{~s}\) and the other...
Study smarter with the SolutionInn App