Professional Documents
Culture Documents
44
44
Sales 10M
Variable Cost 3M
Direct Fixed Cost 5M
Invested capital 8M
Allocated actual interest cost 800k
Capital charge 12%
WSR Inc, sells a variety of drink and food products including potato chips and sodas. The segmented
income statements for these two products are as follows:
Sodas Chips
WSR’s management is considering a special advertising campaign that will run during a major sporting
event. The advertising campaign is expected to cost P30000 and only one product can be featured. In
house marketing studies show that the campaign could increase sales of the soda division by P200000 or
increase sales of chips division by P275000.
26. What will be the overall net effect on the company’s total profits if the advertising focuses on
sodas?
27. What will be the overall net effect on the company’s total profits if the advertising focuses on
chips?
A manufacturing plant has the theoretical capability to produce 54000 printers per quarter but currently
produces only 20250 units. There are 13500 production hours available within the plant per quarter. In
addition to the processing minutes used, the production of printers uses nine minutes of move time, six
minutes of queue time and 10 minutes of rework time.
31. What is the theoretical velocity per hour?
32. What is the actual velocity per hour?
33. What is the theoretical cycle time?
34. What is the actual cycle time ?
35. What is the MCE?
At the beginning of 2005, Petersson Company installed a JIT purchasing and manufacturing system. The
following information has been gathered about one of the company’s products: