# Danshui Sheet2

Topics: Order theory, Expected value Pages: 15 (421 words) Published: April 19, 2015
BREAK
EVEN
POINT
ANALYSIS
Production
Units

200

Revenue
Variable
cost
Fixed
cost

\$41,240
\$40,411
729

Price
per
unit:
(Revenue/Unit)
Variable
cost
per
unit
(Variable

cost/unit)
Contribution
Margin
(Price
per

unit-­‐variable
cost
per
unit)

\$206.20

Break
Even
Point=
(Fixed

cost/Contribution
margin)
or

729/4.145

\$202.06
\$4.15

175.875
units

TOTAL
COST
VARIANCE

ANALYSIS
Total
costs
Budget
Production
Unit
Expected
cost
per
unit

\$41,140,000
200,000
\$205.70

Actual
total
cost
Actual
production
unit
Actual
cost
per
unit

\$38,148,000
180,000
211.91

FLASH
MEMORY
VARIANCE

ANALYSIS

Direct
Material
Price
Varience
(Actual
Price-­‐Standard
Price)
x

Actual
Quantity
(\$29.16-­‐\$27)
x180,000
\$388,800
U

DIRECT
MATERIAL
QUANTITY

VARIANCE
(Actual
Quantity-­‐Standard

Quantity)
x
Actual
Price
(180,000-­‐200,000)
x
\$29.16
\$540,000
F

TOTAL
MATERIAL
VARIANCE
(Price
Variance-­‐Usage
Variance)

\$388,800
U-­‐\$540,000
F
\$151,200
F

LABOR
VARIANCE
ANALYSIS
DIRECT
LABOR
RATE
VARIANCE
(Actual
Rate-­‐Standard
Rate)
x

Actual
Hour
(production)
(\$17.18-­‐\$13.11)
x
180,000
\$732,600

DIRECT
LABOR
EFFICIENCY

VARIANCE
(Actual
Hour-­‐Standard
Hour)
x

Standard
Rate
(180,000-­‐200,000)
x
\$13.11
\$262,200
F
TOTAL
LABOR
VARIANCE
(Labor
Variance-­‐Efficiency

Variance)
\$732,600
U
-­‐
\$262,200
F
\$470,400
U
FIXED
OVER
SPENDING

VARIANCE
(Actual
Fixed
Manufacturing

Fixed

Manufacturing
\$736,000-­‐\$729,000
\$7,000
U

Preliminary
Report
August

Operations

Revenue
(transfer
from

Shenzhen)
Variable
cost
Materials
Flash
memory
Application
process
Chips-­‐phone
Gyroscope
8
other
chips
Variable
supplies
and

tools
Subtotal
Labor
Assembly
and

Packaging
Shipping
Total
Variable
costs
Fixed
costs
Factory
Rent
Machine

Depreciation
Utility
fee
and

taxes
Supervision
Total
fixed
costs
Total
costs
Net
income

Alternatives
Outsource
Increase
factory

wages
Overtime
schedule
Pay
for
performance

policy
Training
Cellular

manufacturing

Recommendation:
Overtime
schedule

plan
and
pay
for

performance

Most
cost
effective

way
to
bosst
up

production
under

same
capacity
Motivate
employees

morale
and
welfare
Achieve
learning

curve
effect
under

well
organized
OT

plan

Monthly

Budget

Actual
Budget

Variance

180,000
units

180,000