Auebach Enterprises Essay Example for Free

Auebach Enterprises Essay These are not presented in scholarly discussion, but are simply the solutions. Student papers are expected to be written in scholarly discussion following APA formatting guidelines incorporating solutions and supported with scholarly research. CASE 3A – AUERBACH ENTERPRISES Auerbach Enterprises manufactures air conditioners for automobiles and trucks manufactured throughout North America. The company designs its products with flexibility to accommodate many makes and models of automobiles and trucks. The company’s two main products are MaxiFlow and Alaska. MaxiFlow uses a few complex fabricated parts, but these have been found easy to assemble and test. On the other hand, Alaska uses many standard parts but has a complex assembly and testing process. MaxiFlow requires direct materials costs which total $135 per unit, while Alaska’s direct materials requirements total $110 per unit. Direct labor costs per unit are $75 for MaxiFlow and $95 for Alaska. Auerbach Enterprises uses machine hours as the cost driver to assign overhead costs to the air conditioners. The company has used a company-wide predetermined overhead rate in past years, but the new controller, Bennie Leon, is considering the use of departmental overhead rates beginning with the next year. The following planning information is available for the next year for each the four manufacturing departments within the company: Overhead Machine Costs Hours Radiator parts fabrication.. $ 80,000 10,000 Radiator assembly, weld, and test. 100,000 20,000 Compressor parts fabrication. 120,000 5,000 Compressor assembly and test.. 180,000 45,000 Total $480,000 80,000 Normally, the air conditioners are produced in batch sizes of 20 at a time. A production batch of 20 units requires the following number of hours in each department: MaxiFlow Alaska Radiator parts fabrication.. 28 16 Radiator assembly, weld, and test. 30 74 Compressor parts fabrication 32 8 Compressor assembly and test 26 66 Total 116 164 Required: 1. Compute the departmental overhead rates using machine hours as the cost driver. 2. Compute a company-wide overhead rate using machine hours as the cost driver. 3. Compute the overhead costs per batch of MaxiFlow and Alaska assuming: (a) The company-wide rate. (b) The departmental rates. 4. Compute the total costs per unit of MaxiFlow and Alaska assuming: (a) The company-wide rate.  (b) The departmental rates. 5. Is one product affected more than the other by use of departmental rates rather than a company-wide rate? Why or why not?

Pericles Funeral Speech :: essays research papers

Pericles’ Funeral Speech   Ã‚  Ã‚  Ã‚  Ã‚  Athens democracy has some evident differences of its own system compared to Sparta’s. They do not copy anyone else form of government, but run theirs in a unique way. In Athens everyone seems to receive fair treatment and poverty is not a struggle they encounter. Pericle informs that the people are friendlier and more respectful neighbors that Athens neighbors. Their individual system is like no others. Athens provides many activities such as regular games and sacrifices. Therefore, he says because of their own success they can enjoy the wonders of other countries. The Athenian system is very successful and operates smoothly because of the determination and effort the people of Athens put forth.   Ã‚  Ã‚  Ã‚  Ã‚  There are some factors that made Athens and Sparta different that need to be addressed. First, Athens controls an â€Å"open city† where visitors can influence and share there knowledge about the â€Å"Athenian way.† In Sparta children are dealt with in a very strict and upright manner. The women of Sparta seemed to have more freedom and power in the household because they were separated from their husbands for large amounts of time and became accustomed to this way of living. They are highly educated to the point where they are smarter than the average person their age. In Athens things are a little more laid back. They learn and mature at their own pace and still end up highly knowledgeable. When in battle Athens brings just themselves while Sparta brings their whole confederacy.   Ã‚  Ã‚  Ã‚  Ã‚  I believe that Athens had an advantage over Sparta. Even though both had their own individual strengths and came together to become one I believe Athens methods were stronger. The Athenians worked well together and seemed to be extremely spiritually motivated to overcome any obstacle. I also feel this way because the way they were brought up as children.

Digital Fortress Chapter 16

â€Å"A ring?† Susan looked doubtful. â€Å"Tankado's missing a ring?† â€Å"Yes. We're lucky David caught it. It was a real heads-up play.† â€Å"But you're after a pass-key, not jewelry.† â€Å"I know,† Strathmore said, â€Å"but I think they might be one and the same.† Susan looked lost. â€Å"It's a long story.† She motioned to the tracer on her screen. â€Å"I'm not going anywhere.† Strathmore sighed heavily and began pacing. â€Å"Apparently, there were witnesses to Tankado's death. According to the officer at the morgue, a Canadian tourist called the Guardia this morning in a panic-he said a Japanese man was having a heart attack in the park. When the officer arrived, he found Tankado dead and the Canadian there with him, so he radioed the paramedics. While the paramedics took Tankado's body to the morgue, the officer tried to get the Canadian to tell him what happened. All the old guy did was babble about some ring Tankado had given away right before he died.† Susan eyed him skeptically. â€Å"Tankado gave away a ring?† â€Å"Yeah. Apparently he forced it in this old guy's face-like he was begging him to take it. Sounds like the old guy got a close look at it.† Strathmore stopped pacing and turned. â€Å"He said the ring was engraved-with some sort of lettering.† â€Å"Lettering?† â€Å"Yes, and according to him, it wasn't English.† Strathmore raised his eyebrows expectantly. â€Å"Japanese?† Strathmore shook his head. â€Å"My first thought too. But get this-the Canadian complained that the letters didn't spell anything. Japanese characters could never be confused with our Roman lettering. He said the engraving looked like a cat had gotten loose on a typewriter.† Susan laughed. â€Å"Commander, you don't really think-â€Å" Strathmore cut her off. â€Å"Susan, it's crystal clear. Tankado engraved the Digital Fortress pass-key on his ring. Gold is durable. Whether he's sleeping, showering, eating-the pass-key would always be with him, ready at a moment's notice for instant publication.† Susan looked dubious. â€Å"On his finger? In the open like that?† â€Å"Why not? Spain isn't exactly the encryption capital of the world. Nobody would have any idea what the letters meant. Besides, if the key is a standard sixty-four-bit-even in broad daylight, nobody could possibly read and memorize all sixty-four characters.† Susan looked perplexed. â€Å"And Tankado gave this ring to a total stranger moments before he died? Why?† Strathmore's gaze narrowed. â€Å"Why do you think?† It took Susan only a moment before it clicked. Her eyes widened. Strathmore nodded. â€Å"Tankado was trying to get rid of it. He thought we'd killed him. He felt himself dying and logically assumed we were responsible. The timing was too coincidental. He figured we'd gotten to him, poison or something, a slow-acting cardiac arrestor. He knew the only way we'd dare kill him is if we'd found North Dakota.† Susan felt a chill. â€Å"Of course,† she whispered. â€Å"Tankado thought that we neutralized his insurance policy so we could remove him too.† It was all coming clear to Susan. The timing of the heart attack was so fortunate for the NSA that Tankado had assumed the NSA was responsible. His final instinct was revenge. Ensei gave away his ring as a last-ditch effort to publish the pass-key. Now, incredibly, some unsuspecting Canadian tourist held the key to the most powerful encryption algorithm in history. Susan sucked in a deep breath and asked the inevitable question. â€Å"So where is the Canadian now?† Strathmore frowned. â€Å"That's the problem.† â€Å"The officer doesn't know where he is?† â€Å"No. The Canadian's story was so absurd that the officer figured he was either in shock or senile. So he put the old guy on the back of his motorcycle to take him back to his hotel. But the Canadian didn't know enough to hang on; he fell off before they'd gone three feet-cracked his head and broke his wrist.† â€Å"What!† Susan choked. â€Å"The officer wanted to take him to a hospital, but the Canadian was furious-said he'd walk back to Canada before he'd get on the motorcycle again. So all the officer could do was walk him to a small public clinic near the park. He left him there to get checked out.† Susan frowned. â€Å"I assume there's no need to ask where David is headed.†

Inventory Carrying Costs Paraphrasing Out Finance Essay - Free Essay Example

Sample details Pages: 5 Words: 1544 Downloads: 9 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? Inventory carrying costs can be defined as the cost related to hold / store in the inventory. The inventory costs are considered to be the highest hidden and unknown costs in the world of business. Most of the managers consider inventory holding costs normally from 15 to 35% of the inventory value, but on the other hand there are also some businessmen and co-operations which do not consider the inventory carrying cost even though these costs are real and substantial and matter a lot. The cost of carrying inventory has a direct relation with the number of ware houses that a company have but also on the firms distribution polices, for example if we have same customer service level, low inventory carrying cost could result in the use of different ware houses which can also slows down the mode of transportation such as railroads. Whereas the high inventory carrying costs could lead in limited number of stock ware houses which save time and results in faster transportation by motor carriers or aircrafts in order to provide same service in both the cases. If we dont know the exact and accurate estimation of inventory carrying cost of a firm, then that firm or company will not be able to choose the distribution policies which would minimize its costs, but if we know the accurate total cost associated with carrying cost of inventory then we know the cost tradeoffs which can be made within the logistics system. Don’t waste time! Our writers will create an original "Inventory Carrying Costs Paraphrasing Out Finance Essay" essay for you Create order Fig-1 illustrates the tradeoffs that are necessary when developing policies like customers service levels, purchasing policies, transportation policies and warehousing systems if maximum corporate profitability is to be realized. The basic Cost Categories There are 4 basic types of cost which should be considered wile calculating the inventory carrying cost which are: Capital costs Inventory service costs Storage space cost Inventory risk costs. These are explained in detail as follow Capital Costs Most of the businessman is of the view that investing inventories is relatively liquid and riskless investment because they feel that they will get somewhat a lower return on the inventory investment. However holding inventory requires capital which could have been used in other investments and by investment money as inventory the company/ firm foregoes the rate of return that could be obtained by doing such type of investment. Therefore the companys opportunity cost of capital should be applied to the investment in inventory. Moreover this cost of capital should be made by out of pocket investment in inventory. Many companies also use some variation of absorption for the inventory valuation; in this they consider only the manufacturing costs that are relevant which are cost of capital, the companys minimum acceptable rate of return should be applied to the variable costs which are directly related with the inventory. The measurement of the cost of capital is very complex. Lets consider an example From the article same to same The coupon rate on bounds is not an accurate measure of cost of debt capital, so to measure the cost of debt capital; the impact of the marginal use of debt on the market price of common stock must be eliminated. Also from the fig. used for the cost of capital will depend on whether the security valuation is made on the basis of investment opportunities, stream of dividends, stream of earnings or discounted cash flow. What is required is a straightforward method of calculating the cost of capital that can be easily understood and applied by businessmen. In most business situations available capital must be rationed to the most attractive investments possibilities. James Moa has explained the concept of a hurdle rate the rate over which the projects will be accepted rate of return for use in the situations where capital is rationed. He defined the rate as the rate of return on the marginal investments, due to the principles of opportunity costs. Consider an example, a firm which pays 10% for funds that it acquires and because of capital rationing the marginal investments promising annual returns of 15%, although the cost of capital is only 10%. This means that relevant time value of money is measured by the return on the most profitable investments. Of course this 15% hurdle rate could also be selected as the cost of capital to the firm. The hurdle concept should be used in order to calculate the actual cost involved. It must be used by the companies experiencing capital rationing, and where the capital rationing is not used the capital invested in inventory is expected to earn a rate competitive with a marketable security and other liquid investments of a firm. Inventory Service Costs: The inventory service costs include the insurance and tax costs. The tax costs vary from state to state depending on the state the inventory is held. If the inventories are exempt to 19.8% of the assessed value than the tax rate may range from zero in those states like in Indiana State. Generally the taxes have a direct relation with the inventory levels like if the inventory level is increasing than the tax rate will also increase or vice versa. While on the other hand the insurance rates are not strictly proportional to the inventory levels, because insurance is usually purchased for a specified time period and insurance policy will be revised periodically based on the expected inventory changes. There are other different reasons that how the insurance rates vary like, they could be affected by the types of materials used in the construction of the building to house the inventory, the buildings age and considerations such as the types of fire prevention equipment installed. Storage Space Costs: In storage space cost 4 types of facilities should be considered which are: Plant warehouses. Public warehouses. Rented (leased) warehouses. Privately owned warehouses. These are explained in detail as follow: Plant warehouses: The costs related to plant warehouses are mostly fixed in nature but there are some variable costs such as the cost the cost of taking inventory and other direct expenses should be included in inventory carrying costs. Incase if the warehouse space is rented or used for some productive purpose but not for storing inventory only then fixed charges and allocated costs are concerned otherwise they irrelevant. Space in Public warehouses: Some things Copied The space in public warehouses is usually rented on a dollar per hundred weight or on a volume occupied basis. As the public warehouses is the most economical way to provide the desired level of customer service without incurring excessive transportation costs. Due to this reason mostly the costs related to public warehouses are considered as throughput costs and only charges for recurring storage that are explicitly or implicitly|(select other words) included in costs. and more the cost of capital related with holding inventory in public warehouses must be included in the cost of carrying inventory. This cost is equal to the variable manufacturing cost plus variable distribution cost, multiplied by the opportunity cost of capital or the hurdle rate. Rented (leased) warehouses: Rented or leased warehouses are normally contacted or leased for a specified period of time. The amount of space which is rented depends upon the maximum amount needed for the period of contract. The warehouse rental charges are fixed and do not vary from day to day with the change in the inventory level, but while on the other hand the rental charges may vary to month to month or year to year until a new contract is made. In most case the rented warehouse charges are mostly fixed but some may vary with the amount of inventory held. In any case these costs could be abolished by not renewing the contract. However these costs should not be included in the inventory carrying cost but in the warehousing cost category. (See exhibit 1). Fig.1 Privately Owned warehouse copied All the operating costs could be eliminated by closing down a privately owned warehouse or the net savings resulting from change to public warehouses should be included in warehousing costs and not I the inventory carrying costs. Inventory Risk Costs: Copied Inventory risk cost is a type a variable cost that varies from company to company. It includes charges for obsolescence, damage, pilferage, and relocation of inventory. The cost of obsolescence is the cost of each unit which must be disposed of at a loss because it becomes old. The costs associated with the damaged goods should be included only for the portion of damage which is directly attributable to the volume of inventory held. The damage incurred during shipping is considered a throughput cost since it will continue regardless of the inventory level. Problems associated with the inventory risk cost: Shrinkage: The problem of shrinkage occurs due to pilfering. (i.e. inventory theft) for American businessmen. They consider this problem more an important than cash frauds or cash embezzlement, because it is hard to control and this cost may be closely related to company security measure than inventory level depending upon the number of warehouse locations. Relocation cost: (copied) Relocation costs are the cost associated with the transshipment of inventory from one warehouse to another to avoid obsolescence. Mostly these costs are the result of tradeoffs between transportation and warehousing costs and not relevant for the inventory holding cost.