MGTB03 Chapter 15(1) Solutions to Class Discussion Questions
15.22 ROI, Transfer Prices, Taxes, Employee Motivation - Fowler Electronics
A. ROI if the screens are transferred at variable cost:
Windsor
Revenue (10,000 x $2,500)
Variable production costs:
(
12.30 Equipment Replacement, NPV, IRR, and Payback - Garco
A.
Initial net investment (1,000,000 - 60,000)
Annual savings 300,000
Net present value
Present Value
Factor
1.00
3.605
Present
Value
$ (940,000)
1,081,500
$ 141,500
B. First calculate the present
5.35 Job Costing, Service Sector - Hawk and Eagle Co.
A. Last years costs:
Direct professional labour
Overhead costs (all other costs)
Total costs
Overhead rate ($21,000,000/$15,000,000)
B. Last years costs:
Direct costs:
Direct professional labour
Other
3.27 Breakeven, Selling Price, Target Profit with Price and Cost Changes - All-Day Candy
Company
A. $4*Q - $2.40*Q - $440,000 = $0
Q = 275,000 boxes to break even
B. Current contribution margin ratio = ($4.00-$2.40)/$4.00 = 40%
Estimated variable costs ne
1.20 Relevant Costs, other factors - NetFlix
A. The question calls for a computation to determine the number of DVDs rented per month
so that the total cost would be the same under the two options. The total cost for the
Netflix option is $21.95. The tota
MGTB03 Chapter 7 Solutions to Class Discussion Questions
7.21 Identifying Costs Using the ABC Cost Hierarchies Steam Whistle Brewing
Following are the CMA answers to this question. However, one could argue that some of the
unit-level costs could instead b
MGTB03 Chapter 1 Solutions to Class Discussion Questions
1.18 Relevant Costs - Avery Car Rental
The question calls for a computation to determine the number of kilometres driven over
four days so that the rental cost would be the same under the two option
Question 3
Inland Company manufactures and sells three products, Red, White and Blue.
Their individual selling prices are: Red, $55 per unit; White, $85 per unit; and
Blue, $110 per unit. The variable costs of manufacturing and selling these products
are:
MGTB03 Chapter 15(2) Solutions to Class Discussion Questions
15.20 ROI, Residual Income, Breakeven Point, Contribution Margin - Oslo Company
[Note: Part C of this problem requires knowledge of breakeven analysis from Chapter 3.]
A. Before calculating ROI,
MGTB03 Chapter 12 Solutions to Class Discussion Questions
12.21 NPV, IRR, ARR and Payback Methods - Amaro Hospital
A. The net present value is ($5,000 x 5.216) - 20,000 = $6,080
B. The factor for the internal rate of return must be
20,000 = $5,000*Factor
MGTB03 Chapter 10 Solutions to Class Discussion Questions
10.19 Production, Labour, Materials, and Sales Budgets - Bullen & Company
Notice that the first quarter is the first three months. Aprils information is needed for some of
Marchs budget calculation
MGTB03 Chapter 4 Solutions to Class Discussion Questions
4.30 Product Emphasis and Keep or Drop, Product Breakeven, Relevant Information
Waterford Ginseng Growers
A. The problem gives no information about resource constraints, so this solution assumes
th