A brewery produces regular beer and a lower-carbohydrate "light" beer. Steady customers of the brewery buy 10 units of regular beer and 19 units of light beer monthly. While setting up the breweryto produce the beers, the management decides to produce extra beer, beyond that needed to satisfy customers. The cost per unit of regular beer is $32,000 and the cost per unit of light beer is$50,000. Every unit of regular beer brings in $200,000 in revenue, while every unit of light beer brings in $500,000 in revenue. The brewery needs at least $15,000,000 in revenue, and hasdetermined that the total demand will be at least 45 units of beer. Complete parts (is (a) and (b)(a) How much of each type of beer should be made so as to minimize total production costs?units of regular beer andunits of light beer should be made, for a minimum total cost of $(Type integers or decimals.)

Production Cost: All of the direct and indirect expenses incurred by enterprises when producing…

Answered: A brewery produces regular beer and a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

2. A beer manufacturer owns a bottling machine that can be run 20 hours per day (4 hours are required for daily maintenance). The plant can produce 10,000 cans of beer per hour. This machine can be used to bottle regular or light beer, but not both at the same time. The profit of light beer is $0.04 per can and the profit of regular beer is $0.05 per can. If the firm uses the machine for the entire 20 hours to bottle light beer to meet customer orders, it cannot bottle any regular beer. What is the opportunity cost of producing light beer?
The Olde Town Microbrewery makes Townside beer,which it bottles and sells in its adjoining restaurant and bythe case. It costs $1700 to set up, brew, and bottle a batchof the beer. The annual cost to store the beer in inventory is$1.25 per bottle. The annual demand for the beer is 21,000bottles and the brewery has the capacity to produce 30,000bottles annually. a. Determine the optimal order quantity, total annual inven-tory cost, the number of production runs per year, and the maximum inventory level.b. If the microbrewery has only enough storage space tohold a maximum of 2500 bottles of beer in inventory,how will that affect total inventory costs?
Maple Inc. manufactures a product that costs $25 per unit plus $43,000 in fixed costs each month. Maple currently sells 6,000 of these units per month for $47 each. If Maple leased a machine for $12,000 a month, it could add features to the product that would allow it to sell for $53 each. It would cost an additional $9 per unit to add these features. How much would Maple's profit be affected if it leased the machine and added features to its product? Multiple Choice Increase $252,000 Decrease $252,000 Increase $6,000 Decrease $30,000
Kerrigan Lumber Yard receives 12,000 large trees each year that they process into rough logs. Currently, Kerrigan sells the rough logs for $75 each. Kerrigan is considering processing the logs further into refined lumber. Each log can be processed into 200 feet of refined lumber at an additional cost of $0.40 per foot. The refined lumber can be sold for $0.95 per foot. Assume that the cost of getting the 12,000 large trees falls by half. Should Kerrigan sell the rough logs at split-off or process it further? Process further, the reduction in the cost of trees makes that option more profitable than it was before. Sell at split-off because the decrease in the cost of the trees makes that option more profitable than it was before. Sell at split-off, the reduction in the cost of the trees is irrelevant. Process further, the reduction in the cost of the trees will lower further processing costs. Process further because the reduction in the cost of the trees is irrelevant
The Mighty Music Company produces and sells a desktop speaker for $200. The company has the capacity to produce 60,000 speakers each period. At capacity, the costs assigned to each unit are as follows: Unit-level costs Product-level costs Facility-level costs The company has received a special order for 11,000 speakers. If this order is accepted, the company will have to spend $20,000 on additional costs. Assuming that no sales to regular customers will be lost if the order is accepted, at what selling price will the company be indifferent between accepting and rejecting the special order? Multiple Choice O O $96.82 $146.82 $104.32 $95 $25 $15 $107.32
Maple Incorporated manufactures a product that costs $33 per unit plus $45,000 in fixed costs each month. Maple currently sells 4,000 of these units per month for $63 each. If Maple leased a machine for $12,000 a month, it could add features to the product that would allow it to increase the selling price. It would cost an additional $8 per unit to add these features. How much would Maple have to charge for the product with additional features to make it worthwhile to lease the machine?
Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Curate Furniture approached Jansen about buying 1,200 shelves for bookshelves it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shelf. The $1.50 per shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320,000. However, the $1.50 packaging cost will not apply in this case. The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jensen accepts the special order?
Yerke Company makes and sells jungle gyms and tree houses for children. For jungle gyms, the price is $120 and the variable expenses are $90 per unit. For tree houses, the price is $200 and the variable expenses are $100. Total fixed expenses are $253,750. Next year, Yerke expects to sell 12,000 gyms and 8,000 tree houses. What is the number of jungle gyms sold by Yerke at the break-even point? a.668 b.1,002 c.1,750 d.2,625 e.875
Yerke Company makes and sells jungle gyms and tree houses for children. For jungle gyms, the price is $120 and the variable expenses are $90 per unit. For tree houses, the price is $200 and the variable expenses are $100. Total fixed expenses are $253,750. Next year, Yerke expects to sell 12,000 gyms and 8,000 tree houses. What is the total sales revenue at the break-even point? a.$411,250 b.$140,000 c.$665,000 d.$253,700 e.$1,076,250
Crane, Inc., sells two types of water pitchers, plastic and glass. Plastic pitchers cost the company $30 and are sold for $40. Glass pitchers cost $26 and are sold for $47. All other costs are fixed at $280,800 per year. Current sales plans call for 14,000 plastic pitchers and 28,000 glass pitchers to be sold in the coming year. How many pitchers of each type must be sold to break even in the coming year? (Use contribution margin per unit to calculate breakeven units.)
Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Cutrate Furniture approached Jansen about buying 1,200 shelves for bookcases it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shelf. The $1.50 per-shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320,000. However, the $1.50 packaging cost will not apply in this case.The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jansen accepts the special order?
Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Cutrate Furniture approached Jansen about buying 1,200 shelves for bookcases it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shelf. The $1.50 per-shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320,000. However, the $1.50 packaging cost will not apply in this case. The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jansen accepts the special order?A. Profits will decrease by $1,200.B. Profits will increase by $31,200.C. Profits will increase by $600.D. Profits will increase by $7,200.

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS