Danshui Plant 2 Answer
ACCOUNTING FOR BUSINESS DECISION MAKING
(MBSA 1413)
DANSHUI CASE STUDY
PREPARED FOR
DR. SULAIMAN ARIS
PREPARED BY
MUHAMMAD ASHRAF BIN LISMAN (MBS141031)
KHAIRUL IKHSAN BIN SELAMAT (MR 121159)
ROHESWARAN GANEASON (MR 131107)
9TH MAY 2015
Questions: Danshui Plant No. 2
1. Using budget data, how many Apple iPhone 4’s would have to have been completed for Danshui Plant No. 2 to break even?
Variable Costs = Material Cost + Labor Cost + Shipping Cost = 187.89+13.11+1.06 = 202.06 / Unit
Fixed Costs = 729,000 / Month
Price = 41,240,000 / 200,000 = 206.2
Contribution Margin = 206.2-202.6 = 4.14 / Unit
When it comes to the break even,
Contribution margin * Unit(BE) = Fixed Costs.
Unit(BE) = 729,000 / 4.14 = 176,086.96，
So the break even for Danshui is 176,087.
The calculations performed, specifies that based on the budget figures the target monthly production required to meet a breakeven point for the contract is 176,087 units. For the purpose of reaching a breakeven level, DC have to meet its monthly budgeted fixed cost of $729,000 in addition to the variable charges attached to production of 176,087 units. Breakeven has been calculated based on $206.2 budgeted sales price (per unit) and $202.06 budgeted variable cost per unit
2. Using budget data, what was the total expected cost per unit if all manufacturing and shipping overhead (both variable and fixed) were allocated to planned production? What was the actual cost per unit of production and shipping?
Total expected cost / Unit = 41,140,000 / 200,000 = $205.7 / Unit
Actual cost / Unit = 38,148,000/180,000 = $211.93 / Unit
Based on budget, per unit total cost for production of 200,000 units as per plan, is $205.7 per unit. This total per unit cost is a combination of $203 as variable cost, which does not include shipping cost. Shipping cost is $1.06 per unit and further fixed cost per unit amounts to $3.65 per unit. Thus total per unit cost reaches up to $205.7 per unit.
Another calculation done
(MBSA 1413)
DANSHUI CASE STUDY
PREPARED FOR
DR. SULAIMAN ARIS
PREPARED BY
MUHAMMAD ASHRAF BIN LISMAN (MBS141031)
KHAIRUL IKHSAN BIN SELAMAT (MR 121159)
ROHESWARAN GANEASON (MR 131107)
9TH MAY 2015
Questions: Danshui Plant No. 2
1. Using budget data, how many Apple iPhone 4’s would have to have been completed for Danshui Plant No. 2 to break even?
Variable Costs = Material Cost + Labor Cost + Shipping Cost = 187.89+13.11+1.06 = 202.06 / Unit
Fixed Costs = 729,000 / Month
Price = 41,240,000 / 200,000 = 206.2
Contribution Margin = 206.2-202.6 = 4.14 / Unit
When it comes to the break even,
Contribution margin * Unit(BE) = Fixed Costs.
Unit(BE) = 729,000 / 4.14 = 176,086.96，
So the break even for Danshui is 176,087.
The calculations performed, specifies that based on the budget figures the target monthly production required to meet a breakeven point for the contract is 176,087 units. For the purpose of reaching a breakeven level, DC have to meet its monthly budgeted fixed cost of $729,000 in addition to the variable charges attached to production of 176,087 units. Breakeven has been calculated based on $206.2 budgeted sales price (per unit) and $202.06 budgeted variable cost per unit
2. Using budget data, what was the total expected cost per unit if all manufacturing and shipping overhead (both variable and fixed) were allocated to planned production? What was the actual cost per unit of production and shipping?
Total expected cost / Unit = 41,140,000 / 200,000 = $205.7 / Unit
Actual cost / Unit = 38,148,000/180,000 = $211.93 / Unit
Based on budget, per unit total cost for production of 200,000 units as per plan, is $205.7 per unit. This total per unit cost is a combination of $203 as variable cost, which does not include shipping cost. Shipping cost is $1.06 per unit and further fixed cost per unit amounts to $3.65 per unit. Thus total per unit cost reaches up to $205.7 per unit.
Another calculation done