The Tri-County Generation and Transmission Association is a nonprofit cooperative organization that pro vides electrical service to rural customers. Based on a faulty long-range demand
- How much will Tri-County need to charge its customers per MWh to break even next year?
- The Tri-County customers balk at that price and conserve electrical energy. Only 95 percent of fore casted demand materializes. What is the resulting surplus or loss for this nonprofit organization?
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Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
- Majestic Corporation provides call-center ordering services for Essential Oils magazine. Majestic receives an annual fee of $200,000 for providing such services and is also eligible to receive a performance bonus up to $65,000 if the average customer wait times are below certain thresholds at the end of the year. Using historical results as well as current expectations, Majestic estimates the chances of achieving the different performance bonuses as shown in the table here. Assume there are NO revenue constraints, and the entity uses the expected value approach to record variable consideration when recognizing revenue during the period. Which is the amount of the performance bonus management can recognize in the transaction price? Average wait times Performance Bonus % Chance of Achieving $65,000 15% < 1 minute < 2 minutes < 3 minutes < 4 minutes < 5 minutes $45,000 $25,000 $5,000 0 10% 50% 20% 5% a. Management would include the variable consideration in the transaction price in the…arrow_forwardExplain the term Service perishability?arrow_forwardCairney, Incorporated manufactures a specialized part used in internal combustion engines. The annual demand for the part is 249,000 units. The facility has a practical capacity of 264,000 units annually. The company leased the current facility because facilities capable of manufacturing the unit require machines that can produce 66,000 units each. The annual cost of the facility is $1,013,760. The variable cost of a part is $4. Required: What cost per unit should the cost system report to facilitate management decision making? Note: Round your answer to 2 decimal places. What is the cost of excess capacity? cost per unit cost of excess capacityarrow_forward
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- Piatinum Web Services designs and maintains websites for small business entrepreneurs. Competition has been intensifying in recent years and the company has been losing business to larger web design firms. Summary data concerning the last two years of operations follow: Estimated hours of service denanded Estimated overhead cost Actual hours of service provided Actual overhead cost incurred Hours of service available at capacity Last Year This Year 1,800 $ 117,000 $ 117,000 1,700 $ 117,000 $ 117,000 2,600 1,550 1,450 2,600 The company applies its overhead costs to jobs using the hours of service provided as the allocation base. For example, this year and last year, 35 service-hours were required to maintain the website for a small company called Verde Consulting. All of Platinum's overhead costs are fixed, and the actual overhead cost incurred was exactly as estimated at the beginning of the year in last year and this year. Required: 1. Platinum Web Services computes its predetermined…arrow_forwardLea Ray is the revenue manager at the 200-room Hilton Garden Inn. She tracks her occupancy and ADR on a daily basis. The following data represent her hotel’s Thursday night performance for the past seven weeks. Thursday Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Occ. % 69.5 73.5 66.5 72.0 72.5 69.0 77.0 ADR $151.50 $145.95 $161.50 $178.50 $179.95 $129.95 $159.95 Using that historical data, calculate her Occupancy %, ADR, and RevPAR for these trailing periods: Note: Round each number to the nearest tentharrow_forwardState what is meant by the term service сарacity ?arrow_forward
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