Calculate efficiency and utilization, given the data below: Al\'s A-One Accounti

Question

Calculate efficiency and utilization, given the data below:

Al's A-One Accounting firm can produce, on average,  7 tax returns per day. The operation has a design capacity of 19 tax returns per day and an effective capacity of 17 tax returns per day. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)

Carrie's Carpet Cleaning Service can clean an average of 5 carpets each day if the design capacity is 9 carpets per day and the effective capacity is 8 carpets per day. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)

Do you think that higher efficiency always goes along with higher utilization? Hint: this depends on design capacity.

This is not necessarily (Click to select)truefalse. If the design capacity is relatively (Click to select)highlow, the utilization could be (Click to select)highlow even though the efficiency was (Click to select)highlow.

Nancy's Novelty Notebooks has forecast next year's demand to be 41,000. The notebooks are considered to incur annual fixed costs of  $26,000 and per-unit variable costs of 35 cents.

If notebooks can be sold for  $1 each, what is the break-even quantity?. (Round your answer to the next whole number.)

If we assume that the forecast is correct, what should be the per-unit price of notebooks, if the company seeks to earn an annual profit of $16,000? Hint: solve for revenue (R). (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

$   

Janet's Jolly Jerseys has decided that it needs to add a new workstation. Janet has shopped around and found two types of workstations, with different costs and revenues. Per-unit revenue is $15. For workstation type A, annual fixed costs are estimated to be $37,000, and variable costs per unit would be $10. For workstation type B, annual fixed costs are estimated to be  $33,000 and variable costs per unit would be $11 for B.

What is the break-even point for each workstation? (Round up or down to the nearest whole number.)

Al's A-One Accounting firm can produce, on average,  7 tax returns per day. The operation has a design capacity of 19 tax returns per day and an effective capacity of 17 tax returns per day. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)

Explanation / Answer

Efficiency = (actual output/effective capacity) *100

Utilization = (actual output/designed capacity) * 100

A. Actual output = 7

Design capacity = 19

Effevtive capacity = 17

Efficiency = 7/17 * 100 = 41.17%

Utilization = 7/19 * 100 = 36.83 %

B. Actual output = 5

Effective capacity = 8

Design capacity = 9

Efficiency = 5/8 * 100 = 62.5%

Utilization = 5/9 * 100 = 55.55 %

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