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See, I told you we made a good decision by introducing the Business and Deluxe chairs. Look at the profits generated by the two chairs that we are selling at a premium.” These were the words of Linda Badger, CEO of Badger Chair Company (BCC). However, Steve Radcliffe, the VP of operations, did not echo her enthusiasm. “Linda, I must say my people on the shop floor are not too happy with the accounting report. They are still unable to believe that the Business and Deluxe chairs made money. According to them the production of these chairs created nothing but problems.”

Badger Chair Company makes four different types of chairs: Regular, Standard, Business, and Deluxe. The latter two types of chairs were introduced in 2022. The production and sales of each type of chair were as follows during the last two years:

Regular Standard Business Deluxe
2021 25,000 25,000
2022 20,000 20,000 5,000 5,000
Price (2022) $36 $44 $69 $89

BCC uses a normal costing system wherein it traces direct material and direct labour costs to the individual products and allocates overhead costs by applying predetermined departmental overhead rates to the actual volume of the allocation base pertaining to each department. For 2022, the following overhead costs were estimated in each of the two departments:

Estimated Overhead Cost and Activity Level
Machining department $548,000 (206,000 machine-hours)
Assembly department $499,000 (349,000 direct labour-hours)

Consider the following information regarding the actual consumption of resources by each of the four products in 2022:

Regular Standard Business Deluxe
Machine-hours 91,000 82,000 18,000 15,000
Direct labour-hours 130,000 150,000 30,000 39,000
Prime costs (per unit) $15 $23 $35 $40

Required:

  1. Compute the profitability of each type of chair (please show all the computational steps). Is there a reason for Linda Badger to be excited about the new chairs? Briefly explain.

  2. In late 2022, Linsey Lindsay, the chief cost accountant, attended a week-long workshop entitled “Advanced Cost Management Methods” offered at a local university. One particular concept she caught on to was activity-based costing, which she decided to implement. She found that the total overhead of $1,047,000 consisted of five cost items and six different activities. Upon further analysis, she determined the proportions in which four of the five cost items were consumed by the six activities (facility-level costs are not to be allocated to the activities).

Indirect Labour Salaries and Benefits ($238,000) Engineering Salaries and Benefits ($298,000) Utilities ($180,000) Depreciation ($135,000) Administrative Costs($196,000)
Machining 20% 10% 35% 40% N/A
Assembly 20% 10% 40% 40% N/A
Machine setup 40% N/A
Engineering 45% N/A
Production planning 25% N/A
Maintenance 20% 10% 25% 20% N/A
100% 100% 100% 100%

She further determined the following consumption of resources across the four products:

Regular Standard Business Deluxe Total
Number of batches 8 10 20 25 63
Setup time per batch 1.5 1.0 2.0 3.0
Machine-hours 91,000 82,000 18,000 15,000 206,000
Labour-hours 130,000 150,000 30,000 39,000 349,000
Maintenance calls 40 32 20 18 110
Maintenance-hours 236 210 198 176 820
Engineering-hours 166 156 112 136 570
  1. Prepare a table listing the different activities, costs associated with each activity, the appropriate allocation base and the allocation rate for each activity.

  2. Using the above activity rates, assign the costs to each of the four types of chairs and determine their profitability. For simplicity, assign the facility-level costs equally among the four products.

  1. Do you agree with Radcliffe? Please support your answer with an appropriate explanation.

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A company is developing its weekly production plan. The company produces two products, A and B, which are processed in two departments. Setting up each batch of A requires $60 of labor while setting up a batch of B costs $80. Each unit of A generates a profit of $17 while a unit of B earns a profit of $21. The company can sell all the units it produces. The data for the problem are summarized below.

Hours required by
Operation A B Hours
Cutting 3 4 48
Welding 2 1 36

What is the appropriate formula to use in cell E8 of the following Excel implementation of the ILP model for this problem?

A B C D E
1 Fixed charge problem
2
3
4 Product A Product B
5 Number to produce
6
7 Unit profit 17 21 Total profit:
8 Fixed cost 60 80
9
10 Resources Hours required Used Available
11 Cutting 3 4 48
12 Welding 2 1 36
13
14 Binary variables
15 Linking constraints

Which answer is correct?

  • =SUMPRODUCT(B5:C5,B7:C7) – SUMPRODUCT(B8:C8,B14:C14)

  • =SUMPRODUCT(B5:C5,B7:C7) – SUMPRODUCT(B8:C8,B15:C15)

  • =SUMPRODUCT(B8:C8,B14:C14) – SUMPRODUCT(B5:C5,B7:C7)

  • =SUMPRODUCT(B5:C5,B7:C7) – B8:C8

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The Victorian government is making a decision about opening new vaccination centres to improve the coverage of COVID-19 vaccination in 10 suburbs (from A-J). Currently, there are 7 potential locations to consider. The operating costs associated with each vaccination centre and the covered areas are listed in the table below. 6 Information related to vaccination centres Potential locations 1 WNA 2 3 Suburbs covered A, B, H,J A, B, C, E, G A, C, E C, D, F, G B, E, 1 E, F, H, J C, D, G, 1 Operating costs 20,000 15,000 12,000 18,000 11,000 16,000 20,000 4 5 6 7 Since suburbs E and G have a large population, they each should be covered by at least two vaccination centres. Also, since locations 1 and 2 are quite close, a maximum of one location can be selected. Based on the constraints, formulate an integer programming model that could be used to minimise the total operating costs and cover all suburbs. You do not need to solve the model.

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The reagent kit is converted into a L-controlled reagent kit. In the 2004 CEO Letter to shareholders, provide treatments that are genetically customised to each patient. S (J & J). The first three players to visit the NGS area were three. R, an international healthcare corporation worth $45 billion, pioneered the 454 System in the 1980s, promising sequencing in only a few of weeks. In his annual report, Lucier stated he was paying less than $sio0,ooo for the human genome. In January, Illumina released the iG Gen, a 454 system successor (a billion bases per run). In the autumn, we look forward to changing the course of Analyzer, whose output is so much higher than that of patients treated just in the laboratory, in the following years. We think Applied Biosystems, moving towards the right use of zo07, joined SOLiD 2.0 in April 2008, which created a $1,000 gene basis in a race of 5-6 billion bases owing to pressures facing our customers and an exponential rise in the value creation as we approach closer to the human race. The concept that a tool firm should establish a basis of 1-2 billion in one pass and then be patient is the optimal method for a modest beginning. We’re still working with Invitrogen. Our technique is a single round (see Exhibit 2). To broaden our thinking, the three actors who explore technology as molecular tools must keep the company moving towards a more thorough grasp of the human system. The decision was made to centre the firm on a technical platform. Gardner asked him about his business practise after more than a decade of experience with businesses purchasing Invitrogen. The protocol called for monthly sessions named the Meetings of the Growth and Innovation Board or GIBS in short. At the office of the CEO. DNA sequence was supposed to be the “strategic elixir” to develop Invitrogen. There have been three degrees of discussion/discussion throughout these sessions. Which business would be happy with which business? To start with, there was a high-level debate. There were three companies that would fulfil strategic objectives? Invitrogen’s approach focuses on a single specialised market, such as animal health, molecular diagnosis or China’s entry. Furthermore, the subject of acquisition candidates might arise. Sometimes Lucier would attend meetings and declare, “I want to buy.” Invitrogen, founded in 1987, was a significant cata or a head of the business unit would travel and inventory the life science companies in the sector. According to its customers, ‘T requires the acquisition of Company X to achieve my growth target’ or,’ ‘because of the critical technology that has emerged from research in academia, the biotechnology and phar- my growth objective,’ or ‘because of a key technology which is emerging as a result of phar- my growth objective’ or ‘because of a key technology which has emerged from my growth target phar-‘ Finally, the team would determine which topics to concentrate on for additional research. Scientists saw Invitrogen as a one-stop shop for all their demands. Vital invitrogen (A) Due to the fast speed of innovation in our organisation, acquisitions will always be part of our strategy. In 2000, Invitrogen bought Technologies, a four times its size. In 2003 Lucier was hired by General Elec as CEO of Invitrogen. The Chairman and CEO of Invitrogen is Greg Lucier. When Lucier came, he maintained his strategy to acquisition. Mark Gardner, Invitrogen’s Vice President Corporate Strategy, stepped up quickly on a bright and beautiful morning to his offices. Invitrogen, a famous consumer life sciences company, has just concluded an incredible fiscal year, with revenue growing by n% to USD 2 billion. On the other hand, Invitrogen completed a stunning 15 purchases between 2005 and 2007 (Figure 1), raising the company to 4,38 people and 35.00 products in 2007 “and tens of thousands of office workers in Carlsbad, California, in January 2008. Customers are welcomed. Invitrogen has earned competence in companies and cost reduction via merger throughout time. All purchases were not successful, though. Bioreliance, a pharmaceutical services business, was called for its reliance on federally financed research by the industry. The acquisition of Gardner for $00 million in 2004 and subsequent sale might impede future expansion. Invitrogen CEO Greg Lucier and Gardner had worked together at GE and Invitrogen over eight years. Lucier knew he could count on Gardner to “have big games” and evaluate whether acquisitions would make Invitrogen an important health-care platform. In 2007, a total of 10 million sz were spent. A team of analysts would then be assembled with the understanding of molecular biology, biochemistry and cell culture. Next month, a team of reagent products ranging from a few hundred to thousands of dollars would return with a list of targets that fulfilled the parameters provided during the initial conversation. “Inquire” the following Invitrogen’s success is based on an aggressive acquisition strategy mixed with great marketing and businesses. Since its establishment in 1987, Invitrogen has acquired eleven firms under the guidance of its originator and CEO. I required resources to thoroughly evaluate five to fifteen companies. Finally, a thesis on investing would be established to determine which company to buy. In addition, the corporation wanted to determine if the purchase was accretive or dilutive. The ships of Lyle Turner were regularly used as acquisition goals.

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