Bimba Sales Case Study

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Net sales for August 2015 increased $21.9k or 3.9% as compared to the year ago period, primarily as a result of higher Bimba sales. Bimba sales rose 33.0% from August 2014 accounting for 77.2% of total sales for the month. Net purchases ended the month at 22.7% of sales compared with 25% for forecast and 26.9% for August 2014. Lower raw material costs were largely attributable to a favorable sales mix and preferred pricing on our 6042 aluminum. August 2015 turnings revenue of $7.2k came in $2.8k under forecast and $32K under turnings revenue reported in August 2014. Aluminum scrap pricing dropped 40.9% to $0.26/lb in the current month. In addition, August 2014 included $22k in brass revenue. Direct labor costs increased from $149.8k in August 2014, representing 35.2% of sales to $217.7k in August 2015, representing 37.6% of sales. The increase in direct labor expense is reflective of a 19.3% increase in direct labor headcount and higher wage related expenses of $31.7k. August 2015 labor cost associated with product sold ended at 26.4% of sales up from 24% in August 2014. OSP costs were $20k representing 3.5% of sales in July 2015 relatively unchanged from July 2014. OSP costs remained relatively flat year-over-year. Subcontract costs for direct labor include wages for 3 temporary headcount. August 2015 expendable tooling costs hit $14.8k or 2.6% of sales down 15.1% compared with the same period a year ago. The current month includes $5.3k of first run tooling for new products.…show more content…
The positive effect on gross margin from higher sales volume and a favorable shift in product mix were offset by increased labor costs and lower turnings revenue. Operating expense increased from $102k or 19.5% of sales to $107.6k or 18.6% of sales. August 2015 includes a charge of $10k for an employee bonus awarded to all Calumet
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