Q&A Hero

Q: The budgeted income statement presented below is for Burkett Corporation for the coming fiscal year. If Burkett Corporation is able to achieve the budgeted level of sales, its margin of safety in dollars would be: Sales (50,000 units) $1,000,000 Costs: Direct materials $270,000 Direct labor 240,000 Fixed factory overhead 100,000 Variable factory overhead 150,000 Fixed marketing costs 110,000 Variable marketing costs 50,000 920,000 Pretax income $ 80,000 A.$172,420. B.$150,000. C.$262,500. D.$275,862. E.$310,115.

Q: Suppose that a fast food restaurant wants the average line to be 4 customers and that 80 customers arrive each hours. How many minutes will the average customer be forced to wait in line?

Q: Suppose that a service facility has an average line of 2 customers that must wait, on average, 5 minutes for service. How many customers are arriving per hour?

Q: Use the following information to determine the contribution margin ratio: Unit sales 50,000 Units Unit selling price $14.50 Unit variable cost $7.50 Fixed costs $204,000 A.6.9%. B.48.3%. C.24.5%. D.51.7%. E.34.1%.

Q: A finite population waiting line model with a single server has an average service time T of 50 minutes and an average time between service requirements U of 350 minutes. Calculate the service factor X. If the population consists of 5 elements, what are the average number waiting, the average number being serviced, and the average number running? Refer to Table D.8.

Q: Use the following information to determine the break-even point in units (rounded to the nearest whole unit): Unit sales 50,000 Units Unit selling price $14.50 Unit variable cost $7.50 Fixed costs $186,000 A.12,828 B.26,571 C.8,455 D.46,667 E.24,800

Q: A finite population waiting line model with a single server has an average service time T of 200 minutes and an average time between service requirements U of 300 minutes. Calculate the service factor X. If the population consists of 5 elements, what are the average number waiting, the average number being serviced, and the average number running? Refer to Table D.8.

Q: Use the following information to determine the break-even point in sales dollars: Unit sales"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6 50,000 Units Dollar sales $500,000 Fixed costs $204,000 Variable costs $187,500 A.$ 88,500. B.$108,500. C.$173,600. D.$326,400. E.$500,000.

Q: Genco, Inc., a small manufacturer of diesel-generator sets has four shearing machines. Because of the age of these machines, they need minor repairs after 30 hours of use. Analysis of previous breakdowns indicates that breakdowns follow a Poisson distribution. The facility employs one repairman specifically to repair these machines. Average repair time is two hours following an exponential distribution. a. What is the service factor for this system? b. What is the average number of these machines in service? c. What is the impact of adding a second repairman?

Q: Use the following information to determine the margin of safety in dollars: Unit sales "u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6 50,000 Units Dollar sales $500,000 Fixed costs $204,000 Variable costs $187,500 A.$ 88,500. B.$108,500. C.$173,600 D.$326,400. E.$500,000.

Q: A waiting-line system that meets the assumptions of M/M/1 has = 1, = 4. Calculate Po. Build a table showing the probability of more than 0, 1, 2, 3, 4, 5, 6,and 7 units in the system. Round to six decimal places in your work

Q: At the order fulfillment center of a major mail-order firm, customer orders, already packaged for shipment, arrive at the sorting machine to be sorted for loading onto the appropriate truck for the parcel's address. The arrival rate at the sorting machine is at the rate of 140 per hour following a Poisson distribution. The machine sorts at the constant rate of 150 per hour. a. What is the utilization rate of the system? b. What is the average number of packages waiting to be sorted? c. What is the average number of packages in the sorting system? d. How long must the average package wait until it gets sorted?

Q: Raven Company has a target of earning $70,000 pre-tax income. The contribution margin ratio is 30%. What amount of dollar sales must be achieved to reach the goal if fixed costs are $36,000? A.$ 23,333. B.$ 36,000. C.$300,000. D.$353,333. E.$420,000.

Q: At the order fulfillment center of a major mail-order firm, customer orders, already packaged for shipment, arrive at the sorting machine to be sorted for loading onto the appropriate truck for the parcel's address. The arrival rate at the sorting machine is at the rate of 100 per hour following a Poisson distribution. The machine sorts at the constant rate of 150 per hour. a. What is the utilization rate of the system? b. What is the average number of packages waiting to be sorted? c. What is the average number of packages in the sorting system? d. How long must the average package wait until it gets sorted? e. What would Lq and Wq be if the service rate were exponential, not constant?

Q: Locus Company has total fixed costs of $112,000. Its product sells for $35 per unit and variable costs amount to $25 per unit. Next year Locus Company wishes to earn a pretax income that equals 10% of fixed costs. How many units must be sold to achieve this target income level? A.1,120. B.8,214. C.11,200. D.12,320. E.14,080.

Q: A dental clinic at which only one dentist works is open only two days a week. During those two days, the traffic arrivals follow a Poisson distribution with patients arriving at the rate of three per hour. The doctor serves patients at the rate of one every 15 minutes. a. What is the probability that the clinic is empty (except for the dentist)? b. What is the probability that there are one or more patients in the system? c. What is the probability that there are four patients in the system? d. What is the probability that there are four or more patients in the system?

Q: A dental clinic at which only one dentist works is open only two days a week. During those two days, the traffic is uniformly busy with patients arriving at the rate of three per hour. The doctor serves patients at the rate of one every 15 minutes. a. What is the probability that the clinic is empty (except for the dentist)? b. What percentage of the time is the dentist busy? c. What is the average number of patients in the waiting room? d. What is the average time a patient spends in the office (wait plus service)? e. What is the average time a patient waits for service?

Q: A company has fixed costs of $270,000, a unit contribution margin of $14, and a contribution margin ratio of 55%. If the firm wants to earn a target $60,000 pretax income, what amount of sales must the company make (rounded to the nearest whole dollar)? A.490,909. B.330,000. C.109,090. D.381,818. E.600,000.

Q: A crew of mechanics at the Highway Department garage repair vehicles that break down at an average of u03bb = 8 vehicles per day (approximately Poisson in nature). The mechanic crew can service an average of u03bc= 11 vehicles per day with a repair time distribution that approximates an exponential distribution. The crew cost is approximately $300 per day. The cost associated with lost productivity from the breakdown is estimated at $150 per vehicle per day (or any fraction thereof). Which is cheaper, the existing system with one service crew, or a revised system with two service crews?

Q: A company has fixed costs of $320,000 and a contribution margin per unit of $15. If the firm wants to earn a target $40,000 pretax income, how many units must be sold (rounded to the nearest whole unit)? A.24,000. B.21,333. C.18,666. D.2,667. E.20,000.

Q: A crew of mechanics at the Highway Department garage repair vehicles that break down at an average of u03bb = 8 vehicles per day (approximately Poisson in nature). The mechanic crew can service an average of u03bc= 10 vehicles per day with a repair time distribution that approximates an exponential distribution. a. What is the probability that the system is empty? b. What is the probability that there is precisely one vehicle in the system? c. What is the probability that there is more than one vehicle in the system? d. What is the probability of 5 or more vehicles in the system?

Q: A crew of mechanics at the Highway Department garage repair vehicles that break down at an average of u03bb = 8 vehicles per day (approximately Poisson in nature). The mechanic crew can service an average of u03bc= 11 vehicles per day with a repair time distribution that approximates an exponential distribution. The crew cost is approximately $300 per day. The cost associated with lost productivity from the breakdown is estimated at $150 per vehicle per day (or any fraction thereof). What is the expected cost of this system?

Q: Gladstone Co. has expected sales of $326,000 for the upcoming month and its monthly break even sales are $300,000. What is the margin of safety as a percent of sales, rounded to the nearest whole percent? A.9%. B.108%. C.52%. D.8%. E.92%.

Q: A crew of mechanics at the Highway Department garage repair vehicles which break down at an average of u03bb = 5 vehicles per day (approximately Poisson in nature). The mechanic crew can service an average of u03bc= 10 vehicles per day with a repair time distribution that approximates an exponential distribution. a. What is the probability that the system is empty? b. What is the probability that there is precisely one vehicle in the system? c. What is the probability that there is more than one vehicle in the system? d. What is the probability of 5 or more vehicles in the system?

Q: Henderson Co. has fixed costs of $36,000 and a contribution margin ratio of 24%. If expected sales are $200,000, what is the margin of safety as a percent of sales? A.6%. B.25%. C.33%. D.50%. E.75%.

Q: A crew of mechanics at the Highway Department garage repair vehicles that break down at an average of u03bb = 7 vehicles per day (approximately Poisson in nature). The mechanic crew can service an average of u03bc= 11 vehicles per day with a repair time distribution that approximates an exponential distribution. a. What is the utilization rate for this service system? b. What is the average time before the facility can return a breakdown to service? c. How much of that time is spent waiting for service? d. How many vehicles are likely to be waiting for service at any one time?

Q: During its most recent fiscal year, Dover, Inc. had total sales of $3,200,000. Contribution margin amounted to $1,500,000 and pretax income was $400,000. What amount should have been reported as fixed costs in the company's contribution margin income statement for the year in question? A.$1,900,000. B.$2,800,000. C.$1,300,000. D.$1,100,000. E.$1,700,000.

Q: A crew of mechanics at the Highway Department garage repair vehicles that break down at an average of u03bb = 7.5 vehicles per day (approximately Poisson in nature). The mechanic crew can service an average of u03bc = 10 vehicles per day with a repair time distribution that approximates an exponential distribution. a. What is the utilization rate for this service system? b. What is the average time before the facility can return a breakdown to service? c. How much of that time is spent waiting for service? d. How many vehicles are likely to be in the system at any one time?

Q: A waiting line meeting the M/M/1 assumptions has an arrival rate of 10 per hour and a service rate of 12 per hour. What is the probability that the waiting line is empty?

Q: A waiting line meeting the M/M/1 assumptions has an arrival rate of 10 per hour and a service rate of 12 per hour. What is the average time a unit spends in the system and the average time a unit spends waiting?

Q: During its most recent fiscal year, Raphael Enterprises sold 200,000 electric screwdrivers at a price of $15 each. Fixed costs amounted to $400,000 and pretax income was $600,000. What amount should have been reported as variable costs in the company's contribution margin income statement for the year in question? A.$2,400,000. B.$1,600,000. C.$3,000,000. D.$2,000,000. E.$1,000,000.

Q: A waiting line meeting the M/M/1 assumptions has an arrival rate of 4 per hour and a service rate of 12 per hour. What is the average time a unit spends in the system and the average time a unit spends waiting?

Q: Watson Company has monthly fixed costs of $83,000 and a 40% contribution margin ratio. If the company has set a target monthly income of $15,000, what dollar amount of sales must be made to produce the target income? A. $245,000 B. $207,500 C. $37,300 D. $170,000 E. $39,200

Q: A waiting line meeting the M/M/1 assumptions has an arrival rate of 4 per hour and a service rate of 12 per hour. What is the probability that the waiting line is empty?

Q: Most banks have changed from having a line in front of each teller to a system where one line feeds all tellers. Which system is better? Why?

Q: Why must the service rate be greater than the arrival rate in a single-channel system?

Q: During March, a firm expects to its total sales to be $160,000, its total variable costs to be $95,000, and its total fixed costs to be $25,000. The contribution margin for March is: A.$ 65,000. B.$ 90,000. C.$120,000. D.$40,000. E.$25,000.

Q: You have seen that, in an M/D/1 problem, the average queue length is exactly one-half the average queue length of an otherwise identical M/M/1 problem. Are all other performance statistics one-half as large also? Explain.

Q: What are the assumptions underlying the M/M/1 waiting line model? Which of these also hold for the M/D/1 model?

Q: What costs are present in waiting line analysis? How do these costs vary with the level of service?

Q: In an earlier chapter, you were introduced to a "traditional" view of costs and a "full cost" view of costs, with respect to a certain type of analysis. How might that lesson apply here? In particular, might operations managers pay more attention to some kinds of costs than others?

Q: Describe the important operating characteristics of a queuing system.

Q: What are the components in a waiting-line system?

Q: What is the waiting-line problem? Why is it important to operations?

Q: Cost-volume-profit analysis is based on necessary assumptions. Which of the following is not one of these assumptions? A.Costs can be classified as variable or fixed. B.Relevant range includes all possible levels of activity that a company might experience. C.Sales price and variable costs per unit of output remain constant as volume changes. D.A constant sales mix in a multiproduct company. E. Total fixed costs are held constant.

Q: There is only one bay and one type of service at an automatic car wash. Provide the most likely characteristics of this system. a. name of model b. number of channels c. number of phases d. arrival rate distribution e. service time distribution f. population size g. queue discipline

Q: What are Ls and Lq, as used in waiting line terminology? Which is larger, Ls or Lq? Explain.

Q: A company's normal operating range, which excludes extremely high or low operating levels that are not likely to occur, is called the: A.Margin of safety. B.Contribution range. C.Break-even point. D.Relevant range. E.High-low point.

Q: Why does it matter whether a population of arrivals is limited or unlimited? Compose your answer in a well-organized, convincing paragraph.

Q: Which of the following costs are most likely to be classified as fixed? A. Shipping costs B. Sales commissions C. Direct labor D. Direct materials E. Property taxes

Q: Students arrive randomly at the help desk of a computer lab. There is only one service agent, and the service time varies from one student to the other. Provide the most likely characteristics for this system. a. name of model b. number of channels c. number of phases d. arrival rate distribution e. service time distribution f. population size g. queue discipline

Q: Customers take a number as they join the waiting line of the customer service counter at a discount store. There are two customer service agents. Provide the most likely characteristics of this system. a. name of model b. number of channels c. number of phases d. arrival rate distribution e. service time distribution f. population size g. queue discipline

Q: Select cost information for Klondike Corporation is as follows: 1,000 units of output 2,000 units of output Total Cost/Unit Total Cost/Unit Direct materials $4,000 $4.00 $8,000 $4.00 Rent expense $2,000 $2.00 $ 2,000 $1.00 Based on this information: A.Both direct materials and rent expense are variable costs. B.Direct materials is a fixed cost and rent expense is a variable cost. C.Both direct materials and rent expense are fixed costs.. D.Direct materials is a variable cost and rent expense is a fixed cost. E.Both direct materials and utilities expense are mixed costs.

Q: Describe the difference between FIFO and LIFO queue disciplines.

Q: Select cost information for Seacrest Enterprises is as follows: 1,000 units of output 5,000 units of output Total Cost/Unit Total Cost/Unit Direct materials $5,000 $5.00 $25,000 $5.00 Utilities expense $1,000 $1.00 $ 3,750 $0.75 Rent expense $4,000 $4.00 $ 4,000 $0.80 Based on this information: A.Both direct materials and rent expense are variable costs. B.Utilities expense is a mixed cost and rent expense is a variable cost. C.Utilities expense is a mixed cost and rent expense is a fixed cost. D.Direct materials is a fixed cost and utilities expense is a mixed cost. E.Both direct materials and utilities expense are mixed costs.

Q: What is queue discipline? State three rules for queue discipline. Which of these rules appears most frequently in the four main models?

Q: What does it mean to have a patient customer in a waiting line?

Q: Provide an example of a limited or finite population for a queue.

Q: In a finite or limited population waiting line, the __________ is calculated from the average service time and average time between service requirements before the problem can be completed.

Q: A cost that includes both fixed and variable cost components is called a: A.Mixed cost. B.Step-variable cost. C.Composite cost. D.Curvilinear cost. E.Differential cost.

Q: The __________ probability distribution is a continuous probability distribution often used to describe the service time in a queuing system.

Q: A cost with a flat cost line within a relevant range that shifts to another level when volume significantly changes is a(n): A.Step-wise cost. B.Fixed cost. C.Curvilinear cost. D.Incremental cost. E.Flat line cost.

Q: A(n) __________ queuing system is one in which the customer receives service from only one station and then exits the system.

Q: A cost that changes as volume changes, but at a nonconstant rate, is called a: A.Variable cost. B.Curvilinear cost. C.Step-wise variable cost. D.Fixed cost. E.Differential cost.

Q: A(n) __________ queuing system has one waiting line, but several servers; a(n) __________ queuing system is one in which the customer receives services from several stations before exiting the system

Q: A(n) __________ queuing system has one line and one server.

Q: A cost that remains unchanged in total despite variations in volume of activity within a relevant range is a: A.Fixed cost. B.Curvilinear cost. C.Variable cost. D.Step-wise variable cost. E.Standard cost.

Q: Of the three types of queue discipline, only __________ is assumed by the four primary waiting line models.

Q: An important assumption in multiproduct CVP analysis is a constant sales mix.

Q: A waiting line has a(n) __________ population if, as arrivals take place, the likelihood of additional arrivals is decreased.

Q: The proportion of sales volumes for various products in a multiproduct company is known as the composite mix.

Q: A(n) __________ occurs when an arrival refuses to enter a waiting line; a(n) __________ occurs when an arrival joins a waiting line, then leaves it.

Q: The __________ of a waiting line and the probability that the queue is empty add to one.

Q: A(n) __________ is a discrete probability distribution that often describes the arrival rate in queuing theory.

Q: A cost-volume-profit (CVP) chart is a graph that plots number of units produced on the horizontal axis and dollars of costs and sales on the vertical axis.

Q: A waiting line or __________ is where items or people are in a line awaiting service; __________ is a body of knowledge about waiting lines.

Q: Which of the following is a requirement for application of Little's Law to be valid? A) arrival rates that follow the Poisson distribution B) FIFO queue discipline C) steady state conditions D) single channel E) multiple phase

Q: Little's Law is not applicable in which of the following situations? A) the opening of a toy store on Black Friday morning B) a 24-hour supermarket C) a gas station with 24-hour self-service pumps D) B and C E) It is applicable to A, B, and C.

Q: A waiting-line system that meets the assumptions of M/M/1 has u03bb = 1, u03bc = 4. For this system, the probability of fewer than two units in the system is approximately A) 0.0625 B) 0.25 C) 0.75 D) 0.9375 E) certain

Q: A waiting-line system that meets the assumptions of M/M/1 has u03bb = 1, u03bc = 4. For this system, the probability of more than two units in the system is approximately A) zero B) 0.015625 C) 0.0625 D) 0.25 E) 0.9375