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# Costs for Riddle Co.

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Hello, I need help figuring out the missing amount and to arrive at the answers.

The following data have been extracted from the records of Riddle Co.:

July December
Production level, in units........................................... 5,000 10,000
Variable Costs......................................................... \$12,000 \$ ?
Fixed Costs.............................................................. ? 18,000
Mixed Costs............................................................ 10,000 ?
Total Costs.............................................................. \$40,000 59,000
¬Required:
a. Calculate the missing costs.
b. Calculate the cost formula for mixed cost using the high-low method.
c. Calculate the total cost that would be incurred for the production of 8,000 units.
d. Identify the two key costs behavior assumptions made in the calculation of your answer to part c.

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#### Solution Preview

a.
Since per unit cost in July is 12000/5000=2.4, variable cost in December is 2.4*10000=\$24,000

Since fixed cost does not chance from July to December, fixed cost in July is still \$18,000

Mixed cost in December=total cost-variable cost-mixed cost=59000-24000-18000=\$17,000

So the complete table is
July December ...

#### Solution Summary

The solution gives detailed steps on calculating cost using high-low method and identifying the two key costs behavior assumptions.

\$2.19

## The solution has 35 choice based questions on Operations management. Questions range from Organisational Management, Operations Design, Project Management, Project Scheduling, Business Process Reengineering, TQM, Continuous improvement, Critical Path Method, Queueing, Supply chain management, Inventory management, JIT, Time series analysis, Time Series, and other concepts in Operations Management. The section also has a brief writeup (250 words) on 3 topics on Operations Management out of the 35 questions listed. These are Operations Management, Project Management & Supply chain management

Instructions - Read the following questions and choose the best answer by 'bolding" your response. Then pick any 3 questions and create a response that incorporates the concepts of the three questions by writing on their importance to operations management.

1. Which of the following factors account for the interest in organizational management?
a) Quality improvements
b) Current problems/opportunities
c) Inventory costs
d) Customer satisfaction
e) All of the above

2. Operations management is defined as the design, operation, and improvement of the systems that create and deliver the firm's primary products and services.
a) True
b) False

3. What is one reason for failure in project scheduling?
b) Incomplete project
c) Lack of diversity in team members
d) Lack of management support
e) Chaos theory
4. _______________ can be defined as planning, directing, and controlling resrouces to meet technical, cost, and time constraints.
a) Configuration management
b) Process analysis
c) Project management
d) Process improvement
e) Riddle's law

5. The radical change paradigm, introduced by Michael Hammer and major consulting firms, is referred to as:
a) Total quality management
b) Synchonous manufacturing
c) Electronic enterprise
d) Manufacturing strategy paradigm
e) Business process reengineering

6. A company that can offer on-site repair in only 1 or 2 hours is an example of a company that is competing on ______________ competitive dimension.
a) Flexibility
b) Process quality
c) Coping with changes in demand
d) Deliver reliability
e) Delivery speed.

7. The main objectives of manufacturing strategy are:
a) Translating required competitive dimensions into specific performance requirements for operations.
b) Making the necessary plans to assure that operations capabilities are sufficient to accomplish performance requirements.
c) Converting order winners into specific performance requirements
d) All of the above
e) Both A and B only

8. A resource that limits the capacity for maximum output of a process is a:
a) Block
b) Starve
c) Bottleneck
d) Process improvement
e) None of the above

9. Quality function deployment is a tool used to identify:
a) Customer requirements
b) Process improvements
c) Quality
d) Cost factors
e) Lead time issues

10. _____________ is the philosophy of continually seeking improvements in a process through the use of team efforts.
a) Continuous improvement
b) Quality control
c) Performance quality
d) Existentialism
e) Conformance quality

11. What is the inherent value of a product in the market place?
a) Conformance quality
b) Performance quality
c) Six Sigms
d) Cost
e) Design quality

12. ________________ is managing the entire organization so that it excels on all dimensions or product and services that are important to the customer.
a) TQM
b) SRC
c) Six Sigma
d) Cost
e) Design quality

13. Manufacturing is involved in what phases of the product design process?
a) Concept Development
b) Production ramp-up
c) Initial Planning
d) Concept Development
e) All of the above

14. ________________ is when the activities in the stage must stop because there is no place to deposit the item just completed.
a) Buffering
b) Blocking
c) Starving
d) Bottleneck
e) None of the above

15. Delay of the process step that differentiates a product as late in the supply chain as possible is called:
a) Delayed delivery
b) Design logistics
c) Fast tracking
d) Mass customization
e) Process postponement

16. ____________ is a measure a firm can use to determine how close it is to its best operating level.
a) Capacity efficiency rate
b) Economic scope
c) Average aggregation rate
d) Capacity utilization rate
e) All of the above

17. Variability in demand magnified as we move from the customer to the producer in the supply chain is called:
a) Cause and effect
b) Push system
c) Bull Whip effect
d) Pull system
e) None of the above

18. The seven elements that address the elimination of waste include all of the following except:
a) Group Technology
c) Minimize set up
d) Quality at the source
e) Large Batch Process

19. Supply chain strategy concepts are applicable to what types of companies?
a) Manufacturing
b) Services
c) Restaurants
d) Airlines
e) All of the above

20. Consider the following data from a company annual report:

Sales 1,000,000
Cost of Goods Sold 800,000
Raw Materials Inventory 100,000
Finished Goods Inventory 75,000
Work-in-process 25,000

The inventory turnover rate for this company is:
a) 4. 0
b) 8.0
c) 10.67
d) 32
e) 2.0

21. Which of the following is not true about JIT systems?
a) The JIT system is based on the philosophy of eliminating waste and utilizing the full capacity of the worker.
b) Under JIT the ideal lost size is one.
c) JIT is typically applied to repetitive manufacturing
d) The goal of JIT is to drive all inventory queues to a moderate level thus minimizing inventory investment and shortening lead times.
e) All of the above statements are true.

22. ____________ is a type of forecast in which data related to past demand are used to predict the future.
a) Collaborative forecasting
b) Past causal relationships
c) Linear regression forecasting
d) Focus forecasting
e) Time series anlysis

23. The aggregate operations plan is concerned with setting production rates by product group or other broad categories for the intermediate team.
a) True
b) False

24. A simple inventory system includes:
a) Optimal replenishment, Two-bin, order point
b) Order points, Two-bin, One-bin
c) Optimal replenishment, Two-bin, One-bin
d) MRP, Two-bin, One-bin
e) Optimal replenishment, order point, One-bin

25. The bill of material contains all of the following except:
a) Complete product description
b) Listing of materials
c) Listing of components
d) Sequence in which the product is created
e) Transaction files

26. Which of the following statements are true about time-series forecasting?
a) Time series analysis is based on the idea that the history of occurrences over time can be used to predict the future.
b) Time series analysis tries to understand the system underlying and surrounding the item being forecast.
c) Under time-series methods, demand is divided into the time-based components such as daily, weekly, etc.
d) Time series methods are useful for long-range forecasts when the demand pattern is erratic.
e) A, B, and C.

27. Given that the previous forecast of 65 turned out to be four units less than the actual demand and next forecast is 66, what would be the value of alpha if the simple exponential smoothing forecast method is used?
a) 0.02
b) 0.4
c) 0.04
d) 0.25
e) None of the above

28. Which MRP system input element specifies how many and when the firm plans to build each end item?
a) Inventory records file
b) Bills of material
c) Master production schedule
d) Capacity planning
e) None of the above

29. Fundamental MRP II questions include all of the following except:
a) What are we going to make?
b) What does it take to make it?
c) What do we have?
d) What do we have to get?
e) Who needs it?

30. A bottleneck is defined as any resource whose capacity limits throughput in the production line.
a) True
b) False

31. Disadvantages of capacity simulation include all of the following except:
a) Simulation can be used as a game for training experience.
b) A significant amount of computer time may be needed to run complex models.
c) A great deal of time and effort typically is spent to develop a model for the simulation.
d) The technique of the simulation, while making progress, still lacks a standardized approach.
e) Still require work in process when used with Kanban.

32. JIT drawbacks include all of the following except:
a) Limited to repetitive manufacturing
b) Stable production level
c) Limited flexibility in products produced
d) Vendors do not need to be located nearby
e) Still require work in process when used with Kanban.

33. A _________approach actually schedules in detail each resource using the setup and runtime required for each order.