As part of its promotional efforts, Department Store X utilizes small-scale promotional signs at its retail...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
As part of its promotional efforts, Department Store X utilizes small-scale promotional signs at its retail stores. At each of the 75 store locations, the company produces an estimated 100 promotional signs per month. Each small "sign shop" operates as its own unit, and each location incurs the same variable costs to use the machines. Installation costs, those incurred to set up the machine for printing, printing costs (paper, ink, etc.), and maintenance costs comprise total production costs. On average, monthly production costs are estimated to be $5,000 per machine: $1,000 for installation, $3,000 for printing, and $1,000 for maintenance is incurred at each location. Therefore, the total production of these signs costs the company, approximately $375,000 per month. An economic consultant estimates that total production costs for printing the signs in one location would be approximately $231,000 per month. Installation costs for the single machine will be $1,000. Justify the decision of printing the signs in one location clearly indicating any possible cost savings. As part of its promotional efforts, Department Store X utilizes small-scale promotional signs at its retail stores. At each of the 75 store locations, the company produces an estimated 100 promotional signs per month. Each small "sign shop" operates as its own unit, and each location incurs the same variable costs to use the machines. Installation costs, those incurred to set up the machine for printing, printing costs (paper, ink, etc.), and maintenance costs comprise total production costs. On average, monthly production costs are estimated to be $5,000 per machine: $1,000 for installation, $3,000 for printing, and $1,000 for maintenance is incurred at each location. Therefore, the total production of these signs costs the company, approximately $375,000 per month. An economic consultant estimates that total production costs for printing the signs in one location would be approximately $231,000 per month. Installation costs for the single machine will be $1,000. Justify the decision of printing the signs in one location clearly indicating any possible cost savings.
Expert Answer:
Answer rating: 100% (QA)
Printing the signs in one location can lead to cost savings for Department Store X Heres a justification for this decision Economies of Scale By centr... View the full answer
Related Book For
Intermediate Accounting Volume 2
ISBN: 9781260881240
8th Edition
Authors: Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell, Ingrid McLeod-Dick, Kayla Tomulka, Romi-Lee Sevel
Posted Date:
Students also viewed these finance questions
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Please help with the discusin questions ! I give thumbs up Case #1: Hailing a New Era: Haier in Japan As one of the most valuable brands in China, Haier designs,manufactures, and sells various home...
-
As economic conditions became more demanding for some employers, other firms continued to recruit people for jobs. One firm, Kia Motors America, added a large number of jobs at one of its newer...
-
Two long wires are placed in the x-y plane, as shown in the figure. Each wire carries a current of 1.5 A, directed out of the page. If the distance d = 3.0 m, what is the net magnetic field due to...
-
Superimposing a control volume that is differential in x on the tube flow conditions of Figure 8.8, derive Equation 8.45a.
-
Why are ethics and social responsibility valuable to organizations?
-
Shareholder value is cash-oriented. Do you agree with this statement? Give reasons.
-
On January 1, 2016, Prairie Enterprises purchased a parcel of land for $28,000 cash. At the time of purchase, the company planned to use the land for a warehouse site. In 2018, Prairie Enterprises...
-
American Literature II Essay/Exercise One: Research This exercise and essay have several parts: make sure to read and follow the instructions carefully. This is the first part of the assignment, due...
-
Lou Hoskins and Shirley Crothers are organizing Red Lodge Metals Unlimited Inc. to undertake a high-risk gold-mining venture in Canada. Lou and Shirley tentatively plan to request authorization for...
-
Write down the steps required to compile a program developed in "C" language (from source file to executable file). Say, you have a file "HelloWorld.c", write down the commands required to create an...
-
An investor received an e-mail from their Stock Broker informing them that they needed to deposit funds to their account, as a result of a recent decline in stock price, and if they don't deposit the...
-
The function d(x)=5x-3x+1 is quadratic. a. Write the equation in vertex form. b. Write the equation of the axis of symmetry. C. Write the coordinates of the vertex. d. What is the maximum or minimum...
-
Describe ways to identify and evaluate students who are gifted.
-
Explain how expenditures can be controlled during the budget process via risk management. Who is often the target of these control mechanisms, the policymaker or the administrator? Who often is...
-
Annette Martinelli opened Best Bookkeeping Business ( BBB ) on June 1 , 2 0 1 9 . She rented office space and hired a part - time employee. Annette set up her Chart of Accounts as follows: Assets...
-
Your managers showed you the income statement for your company. The income statement shows a net profit margin of 5.4%, yet your manager says the company will need to borrow money to meet their...
-
Hotel Majestic is interested in estimating fixed and variable costs so that the company can make more accurate projections of costs and profit. The hotel is in a resort area that is particularly busy...
-
Brockton Ltd. began applying IFRS in 20X8. One of the necessary adjustments was to adjust past inventory records to remove warehousing expenses from the balances of the ending inventories for 20X5,...
-
The following is selected information from the accounting records of Slow Inc. for 20X9 its first year of operations: In determining pre-tax accounting earnings, the following deductions were made:...
-
Niko Ltd. signed a lease for a five-year term that requires yearly, beginning-of-year payments of $104,000 including maintenance. Based on allocating the lease payment on relative stand-alone prices,...
-
How has the escalating role of board members and the audit committee affected corporate governance?
-
Describe regulatory influences on board members and management. What have been the effects of these influences?
-
For three organizational structure types (entrepre neurial, bureaucratic, adhocracy), briefly describe the likely characteristics of corporate governance.
Study smarter with the SolutionInn App