At Gems in the Rough, a jewelry company, the engraving department is a bottleneck. The company is considering hiring an extra worker, whose salary will be $55,000 per year, to ease the problem. Using the extra worker, the company will be able to engrave 8,000 more units per year. The selling price per unit is $16.00. The cost per unit currently is $11.75 as shown: Direct material $4.45 Direct labor 2.10 Variable overhead 1.40 Fixed overhead (primarily depreciation of equipment) 3.80 Total $11.75 What is the annual financial impact of hiring the extra worker for the bottleneck process?

At Gems in the Rough, a jewelry company, the engraving department is a bottleneck. The company is considering hiring an extra worker, whose salary will be $55,000 per year, to ease the problem. Using the extra worker, the company will be able to engrave 8,000 more units per year. The selling price per unit is $16.00. The cost per unit currently is $11.75 as shown: Direct material $4.45 Direct labor 2.10 Variable overhead 1.40 Fixed overhead (primarily depreciation of equipment) 3.80 Total $11.75 What is the annual financial impact of hiring the extra worker for the bottleneck process?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 12PA: Ac Gems in the Rough, a jewelry company, the engraving department is a bottleneck. The company is...

See similar textbooks

Similar questions

Ac Gems in the Rough, a jewelry company, the engraving department is a bottleneck. The company is considering hiring an extra worker, whose salary will be $56,000 per year, to ease the problem. Using the extra worker, the company will be able to engrave 8,000 more units per year. The selling price per unit is $16. The cost per unit currently is $11.85 as shown: What is the annual financial impact of hiring the extra worker for the bottleneck process?
Variety Artisans has a bottleneck in their production that occurs within the engraving department. Arjun Naipul, the COO, is considering hiring an extra worker, whose salary will be $45,000 per year, to solve the problem. With this extra worker, the company could produce and sell 3,500 more units per year. Currently, the selling price per unit is $18 and the cost per unit is $5.85. Using the information provided, calculate the annual financial impact of hiring the extra worker.
Artisan Metalworks has a bottleneck in their production that occurs within the engraving department. Jamal Moore, the COO, is considering hiring an extra worker, whose salary will be $54,000 per year, to solve the problem. With this extra worker, the company could produce and sell 2,900 more units per year. Currently, the selling price per unit is $25.00 and the cost per unit is $7.50. $3.40 1.00 0.40 2.70 $7.50 Direct materials Direct labor Variable overhead Fixed overhead (primarily depreciation of equipment) Total Using the Information provided, calculate the annual financial Impact of hiring the extra worker. Profit $ Increase ✔
Artisan Metalworks has a bottleneck in their production that occurs within the engraving department. Jamal Moore, the COO, is considering hiring an extra worker, whose salary will be $54,000 per year, to solve the problem. With this extra worker, the company could produce and sell 3,000 more units per year. Currently, the selling price per unit is $25.00 and the cost per unit is $7.80. Direct materials $3.50 Direct labor 1.10 Variable overhead 0.40 Fixed overhead (primarily depreciation of equipment) 2.80 Total $7.80 Using the information provided, calculate the annual financial impact of hiring the extra worker. Profit $_____ ______
Artisan Metalworks has a bottleneck in their production that occurs within the engraving department. Jamal Moore, the COO, is considering hiring an extra worker, whose salary will be $54,000 per year, to solve the problem. With this extra worker, the company could produce and sell 3,000 more units per year. Currently, the selling price per unit is $26.00 and the cost per unit is $7.75. Direct materials $3.40 Direct labor 1.10 Variable overhead 0.45 Fixed overhead (primarily depreciation of equipment) 2.80 Total $7.75 Using the information provided, calculate the annual financial impact of hiring the extra worker. Profit $fill in the blank 1
Artisan Metalworks has a bottleneck in their production that occurs within the engraving department. Jamal Moore, the COO, is considering hiring an extra worker, whose salary will be $54,000 per year, to solve the problem. With this extra worker, the company could produce and sell 2,900 more units per year. Currently, the selling price per unit is $25.00 and the cost per unit is $7.50. Direct materials $3.40 Direct labor Variable overhead Fixed overhead (primarily depreciation of equipment) Total 1.00 0.40 2.70 $7.50 Using the Information provided, calculate the annual financial Impact of hiring the extra worker. Profit $ ✓ Increase
Artisan Metalworks has a bottleneck in their production that occurs within the engraving department. Jamal Moore, the COO, is considering hiring an extra worker, whose salary will be $54,000 per year, to solve the problem. With this extra worker, the company could produce and sell 2,900 more units per year. Currently, the selling price per unit is $26.00 and the cost per unit is $7.65. Direct materials $3.40 Direct labor 1.00 Variable overhead 0.45 Fixed overhead (primarily depreciation of equipment) 2.80 Total $7.65 Using the information provided, calculate the annual financial impact of hiring the extra worker. Profit $?? increase
At RIM, Sharpton Corporation, the engraving department is a bottleneck and the company is considering hiring an extra worker whose salary will be $55,000 per year to mitigate the problem. With the extra worker, the company will be able to produce and sell 7,000 more units per year. The selling price per unit is $14. Cost per unit currently at $8 is as follows: Direct material $2.75 Direct labour 1.00 Variable overhead 0.25 Fixed overhead (depreciation of equipment) 4.00 ----------- Total $8.00 ------------…
ABC is a company that does land surveys and engineering consulting. They have an opportunity to purchase new computer equipment that will allow them to render their drawings and surveys much more quickly. The new equipment will cost them an additional $1,200 per month, but they will be able to increase their sales by 10% per year. Their current annual cost and break-even figures are shown below. Units sold 1,400 Sales proce per unit 225 variable cost per unit 145 fixed costs 52,000 break even (in units) 650 contribution margin ratio 0.36 break even in dollars 146,250 sales 315,000 variable cost 203,000 fixed costs 52,000 net income loss 60,000 What will be the impact on the break-even point if ABC purchases the new computer? A. What will be the impact on net operating income if ABC purchases the new computer? B. What would be your recommendation to ABC regarding this purchase? Current New Computer Units sold Sales price per unit…
A recently retired professor, Melinda Marketing, plans to establish the Hot-Air FanCompany and manufacture circulating fans. She estimates the fixed cost of operations tobe $357,500 annually. The variable cost of producing the fans is forecasted to be $85 perunit.a. How many fans must be sold to break even if the fans are priced at $150?b. If Hot-Air sells 6,000 fans, what will be the EBIT?c. If Hot-Air sells 6,000 fans and has interest expense of $8,125, what is Hot-Air’stimes-interest-earned? Hot-Air does not have any nonoperating expenses.d. If the fans are priced at $150, what is Hot-Air’s breakeven sales?
A company is negotiating with a potential supplier for the purchase of 100,000 widgets. The company estimates that the supplier’s variable costs are $5 per unit andthat the fixed costs, depreciation, overhead, and so on, are $50,000. The supplierquotes a price of $10 per unit. Calculate the estimated average cost per unit. do youthink $10 is too much to pay? Could the purchasing department negotiate a betterprice? How?
A software provider buys blank Bluray DVDs at $550 per hundred and currently uses 2 million DVDs per year. The manager believes that it may be cheaper to make the DVDs rather than buy them. Direct production costs (labour, materials, fuel) are estimated at $2.50 per DVD. The equipment needed would cost $3 million. The equipment should last for 15 years, provided it is overhauled every 5 years at a cost of $250 000 each time. The operation will require additional current assets of S400 000. The company's required rate of return is 12 per cent. Evaluate the proposal using NPV formula and not excel.