The Sloan Moving Corporation Transports Household Goods From One City To Another Within The Continental United States I 1 (50.46 KiB) Viewed 70 times
The Sloan Moving Corporation Transports Household Goods From One City To Another Within The Continental United States I 2 (39.98 KiB) Viewed 70 times
The Sloan Moving Corporation Transports Household Goods From One City To Another Within The Continental United States I 3 (35.31 KiB) Viewed 70 times
The Sloan Moving Corporation transports household goods from one city to another within the continental United States. It measures quality of service in terms of (a) time required to transport goods, (b) on-time delivery (within two days of agreed-upon deliv- ery date), and (c) number of lost or damaged items. Sloan is considering investing in a new scheduling-and-tracking system costing $160,000 per year, which should help it improve performance with respect to items (b) and (c). The following information describes Sloan's current performance and the expected performance if the new system is implemented: Current Performance 85% $60 $40 3,000 cartons Expected Future Performance 95% $60 On-time delivery performance Variable cost per carton lost or damaged Fixed cost per carton lost or damaged Number of cartons lost or damaged per year $40 1,000 cartons Required Sloan expects each percentage point increase in on-time performance to increase revenue by $20,000 per year. Sloan's contribution margin percentage is 45%. 1. Should Sloan acquire the new system? Show your calculations. 2. Sloan is very confident about the cost savings from fewer lost or damaged cartons as a result of introducing the new system but unsure about the increase in revenues. Calculate the minimum amount of increase in revenues needed to make it worthwhile for Sloan to invest in the new system. Management Roundtable, "The Bell Group Uses the Balanced Scorecard with the Theory of Constraints to Keep Strategic Focus, Fast Track.roundtable.com, fasttrack.roundtable.com/app/contentknowledgesouroditem/197 (accessed May 15, 2007).
• XYZ Ltd., manufactured and sold 1000 electric irons last year at a price of $800 each. The . cost structure of electric irons is as follows: . Selling price Variable cost per unit Factory overhead (fixed) Total cost per unit Profit $800 $350 $200, total fixed costs $200,000 $550 x $250 x
• due the heavy competition, price has to be reduce, to $750 for the coming year. assuming no change in costs, state the number of electric irons that would have to be sold at the new price to ensure the same amount of total profits as that of the last year.
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