Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem: A soft drink company has three bottling plants throughout the country. Bottling occurs at the regional level because of the high cost of transporting bottled soft drinks. The parent company delivers each plant with the syrup. The bottling plants combine the syrup with carbonated soda to make and bottle the soft drinks. The bottled soft drinks are then sent to regional grocery stores.

The bottling plants are treated as costs centers. The managers of the bottling plants are evaluated based on minimizing the cost per soft drink bottled and delivered. Each bottling plant uses the same machine, but some produce more bottles of soft drinks because of different demand. The costs and output for each bottling plant are:

 

A

B

C

Units Produced

$10,000,000

20,000,000

30,000,000

Variable Costs

200,000

$450,000

$650,000

Fixed Costs

1,000,000

$1,000,000

$1,000,000

[A] find out the average cost per unit for each plant.

[B] Why would the manager of plant A be unhappy with using the average cost as the performance measure?

[C] Determine alternative performance measure that would make the manager of plant A happier?

[D] Under what circumstances might the average cost be a better performance measure?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M918546

Have any Question? 


Related Questions in Basic Finance

1 what is the sinking-fund factor how and why is it used2

1. What is the sinking-fund factor? How and why is it used? 2. What is an internal rate of return? How is it used? How does it relate to the concept of compound interest?

A building owner is evaluating the following four

A building owner is evaluating the following four alternatives for leasing space in an office building for the next five years. Write a two-three page paper and prepare an Excel spreadsheet evaluating each of the four di ...

Go to turbotaxintuitcomtax-tools and click tax refund

Go to turbotax.intuit.com/tax-tools/ and click "Tax Refund Calculator" to answer the following questions: a. Assume that your filing status is single, you are not head of household, and you are 35 years old. Compute your ...

Consider whether each of the following research reports

Consider whether each of the following research reports seems to describe an applied or a basic research project, and explain why: An experimental analysis of the impact of contingent reinforcement on salespersons' perfo ...

A company has two divisions of equal size a computer

A company has two divisions of equal size: a computer manufacturing division and a data processing division. Its CFO believes that stand-alone data processor companies typically have a WACC of 8%, while stand-alone compu ...

Insurance policiesplease answer the following questions

Insurance Policies Please answer the following questions with complete sentences. Questions that ask for your analysis and opinion must state more than just a conclusion...you must also provide your reasoning and/ or fac ...

1 what is meant by an agency cost or agency problem do

1. What is meant by an "agency cost" or "agency problem"? Do these interfere with shareholder wealth maximization? Why? What mechanisms minimize these costs/problems? 2. Are ethics critical to the financial manager's goa ...

1 how can strategic procurement contribute to the quality

1. How can strategic procurement contribute to the quality of products produced by a manufacturing organization? 2. Explain the rationale underlying volume consolidation. What are the risks associated with using a single ...

The hudson corporation makes an investment of 24000 that

The Hudson Corporation makes an investment of $24,000 that provides the following cash flow: Year Cash Flow 1................ $ 13,000 2................ 13,000 3................ 4,000 a. What is the net present value at ...

1 why might the after-tax internal rate of return on equity

1. Why might the after-tax internal rate of return on equity (ATIRRe) differ for a new investor versus an existing investor who keeps the property? 2. What factors should be considered when deciding whether to renovate a ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen