Chapter 5 Homework 2

Chapter 5 Homework 2 - C hapter 5 P roblem 23, Case 28 23)

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Chapter 5 Problem 23, Case 28 23) , - , , - 312 000 274 00080 000 , = , , = 60 000 38 00020 000 $1.9/machine hour Fixed 312,000-1.9(80,000)= $160,000 274,000-1.9(60,000)= $160,000 High Activity (80,000 Machine Hours) Indirect Materials(1.5*80,000) 120,000 Rent 130,000 Maintenance Fixed 30,000 Variable 32,000 Total Factory Overhead 312,000 , - , , - 62 000 54 00080 000 , = , , = 60 000 8 00020 000 $0.40/machine hour Fixed 62,000-0.4(80,000)= $30,000 54,000-0.4(60,000)= $30,000 Y= $160,000+1.9(65,000)= $283,500 28) 1. While Blue Nile seems to be incorporating all of the different customer value propositions, I believe that they rely primarily on operational excellence. Their main focus is getting diamonds to their customers for less money than their competitors. “We have developed an efficient online cost structure and a unique supply solution that eliminates traditional layers of diamond wholesalers and brokers, which allows us to generally purchase most of our product offerings at lower prices by avoiding
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Chapter 5 Homework 2 - C hapter 5 P roblem 23, Case 28 23)

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