Essay about Anagene In

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Case Preview and Questions for Anagene, Inc.* A start-up company struggles to understand its operating margins. How much of the large monthly fluctuations in margins is real and how much is caused by its costing system? Skim the section on The Genomics Analysis Market on pages 1-3 of the case but pay attention to the information on competitive position. Case Questions: 1. Work the Youngstown Products numerical example on the following page. (This should take only a few minutes and is basically a short refresher on a phenomenon we saw in the Bridgeton case.) Answer is inline in Youngstown case question. 2. The cartridge margins shown in Tables A and B vary from 17% to 65%. What elements of cost account for the difference…show more content…
Youngstown produced four products in its plant and decided to eliminate products that no longer contributed positive margins. Details on the four products are provided below: Product A B C D Total Production Volume (units) 10,000 8,000 6,000 4,000 Selling Price $15.00 18.00 20.00 22.00 Materials/unit $ 4.00 $ 5.00 $ 6.00 $ 7.00 DLH/unit 0.24 0.18 0.12 0.08 Total DLH 2,400 1,440 720 320 4,880 Plant Overhead $122,000 DL rate/hour $30 Youngstown has a traditional cost system. It calculates a plant-wide overhead rate by dividing total overhead costs by total direct labor hours. Assume, for the calculations below, that plant overhead is a committed (fixed) cost during the year, but that direct labor is a variable cost. 1. Calculate the plant-wide overhead rate. Use this rate to assign overhead costs to products and calculate the profitability of the four products. Product A B C D Total Production Volume 10,000 8,000 6,000 4,000 Selling Price 15 18 20 22 Materials/unit 4 5 6 7 Total DLH 2,400 1,440 720 320 4,880 Total sales 150,000 144,000 120,000 88,000 502,000 Total materials cost 40,000 40,000 36,000 28,000 144,000 Total DLH 72,000 43,200 21,600 9,600 146,400 Total overhead 60,000

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