2. Refer to your answer to requirement 1. If the number of parts received increased from...
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2. Refer to your answer to requirement 1. If the number of parts received increased from 30,000 to 40,000, which number(s) would most likely change: total gallons used, total hours operated, or gallons per part received? Derive an equation that calculates total fuel cost as a function of fuel cost per gallon and fuel consumption rate. Predict the total cost of the receiving activity if the number of parts received is 40,000. 3. The managers in the receiving department have a plan that will improve fuel efficiency. What is the predicted total cost of receiving 30,000 parts if the fuel consumption rate is reduced by 20% (assume fuel costs per gallon will not change)? Will the receiving department achieve Boeing's 10% cost-reduction goal? Why or why not? 4. Comment on the benefits of the new cost-driver model compared to the one based solely on one cost driver-"number of parts received." 5. Can you think of other refinements in the cost-driver model based on the data that are given? 2. Refer to your answer to requirement 1. If the number of parts received increased from 30,000 to 40,000, which number(s) would most likely change: total gallons used, total hours operated, or gallons per part received? Derive an equation that calculates total fuel cost as a function of fuel cost per gallon and fuel consumption rate. Predict the total cost of the receiving activity if the number of parts received is 40,000. 3. The managers in the receiving department have a plan that will improve fuel efficiency. What is the predicted total cost of receiving 30,000 parts if the fuel consumption rate is reduced by 20% (assume fuel costs per gallon will not change)? Will the receiving department achieve Boeing's 10% cost-reduction goal? Why or why not? 4. Comment on the benefits of the new cost-driver model compared to the one based solely on one cost driver-"number of parts received." 5. Can you think of other refinements in the cost-driver model based on the data that are given?
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Related Book For
Introduction to Management Accounting
ISBN: 978-0133058789
16th edition
Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta
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