PPA 602 Week 3 two discussion question and one assignment
- Economic Order Quantity
Analyze the following scenario: Meals for the Homeless buys 30,000 large cans of green beans each year. The cost of each can of beans is $4. The cost to place an order for beans, including the time of the employee placing the order, shipping, and so forth, comes to $20 per order. The out-of-pocket carrying costs (for storage, etc.) are $0.30 per can per year. In addition, Meals calculates its interest at 5 percent. How many cans should be ordered at a time? How many orders should there be each year? What are the total ordering costs and carrying costs at the EOQ? Contrast the total of the ordering costs and carrying costs at EOQ to the total ordering and carrying costs if the cans were all ordered at the beginning of the year. (You will need to read and understand Appendix 7-A to complete this discussion). Clearly label the calculations of the economic order quantity using Excel (you may attach your Excel worksheet to your discussion post in your online classroom). Use formulas to calculate the EOQ and format the cells to insert a comma if there is more than three numbers. Round to the nearest whole number. Explain the advantages and disadvantages of EOQ in a Word document not to exceed 200 words. You must respond to at least two of your classmates’ postings to receive full credit.
- Internal Controls
Joy Becket is the director of Eyeglasses for the Poor (EP). EP receives donations of eyeglasses and recycles them for use by the nearsighted needy around the world. Sometimes the eyeglass frames are expensive designer frames that can be sold to raise operating funds for the organization. Joy is concerned that EP’s resources are not adequately safeguarded. This problem is compounded by the fact that there are relatively few employees so separation of duties is difficult. She does know that if anything goes wrong (i.e. waste of resources, embezzlement), she will be held responsible. Therefore, she has called you in as an expert consultant in the area of accountability and control. She has asked you to recommend specific procedures and policies for enhancing the internal controls for the organization. Write a one-page memo identifying policies and procedures she should consider adopting. Respond to at least two of your classmates’ postings.
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Volume, Risk, and Price Variances
Analyze the variances in the following scenario:
You are the nursing administrator for a medical group that expects a severe outbreak of the flu this winter. You hire additional staff to treat the patients and administer shots. Your special project budget was for 1,000 hours of part-time nurses’ services at $40 per hour, for a total cost of $40,000. It was expected that these nurses would administer 400 flu shots and treat 1,600 flu patients. The medical group typically charges $50 for a flu shot and $80 for treating a flu patient. Actually, the group had 1,200 patients who received the flu shot and 1,400 who had the flu and received treatment. On average, it was able to collect $55 per flu shot and $70 per flu patient.
Compute the volume, mix, and price revenue variances. How did things turn out for the group considering just revenues? How did they turn out from a profit perspective? Use either theapproach from chapter 8 or from Appendix 8-A to solve. Clearly label the calculations of the required variances using Excel. Use formulas to calculate the three variances and format the cells to insert a comma if there is more than three numbers and round to the nearest whole number. Explain the meaning of the variances in a two page Word document.