Case Questions Danshui Plant

900 WordsApr 12, 20154 Pages
Table of Contents 1) Explain briefly contribution margin. How is it calculated? 2 2) Using Budget Data, estimate the breakeven sales for Apple iPhone 4 3 3) Using the budget Data, what was the total expected cost per unit if all manufacturing and shipping overhead (both variable and fixed) were allocate to planned production? What was the actual cost per unit of production and shipping? 3 4) State the differences between a static budget and a flexible budget. Prepare Flexible budget for 160,000 iPhone 4’s 4 5) Prepare Flexible budget for 180,000 iPhone 4’s and calculate flexible budget variances using actual costs for August. 5 6) Give your suggestions on some strategies or decisions that Wentao Chen should consider in trying to…show more content…
Total Cost Per Unit Total Variable Cost Per Unit+ Total Fixed Cost Per Unit (40,411,000/180,000)+(729000/180,000) 224.50+4.05 =228.55 Total expected cost / Unit 41,140,000 / 200,000 = $205.7 Per Unit Actual cost /Unit 38,148,000/180,000 = $211.93 Per Unit 4) State the differences between a static budget and a flexible budget. Prepare Flexible budget for 160,000 iPhone 4’s Static Budget is a budget that never changes, even if the activity level changes. However, the Flexible Budget changes based on actual activity. The flexible budget is more accurate than the static budget because budget amounts change for changes in activity. Revenue for 160,000 Units 41,240*1,000/200,000*160,000 =32,992,000 5) Prepare Flexible budget for 180,000 iPhone 4’s and calculate flexible budget variances using actual costs for August. Flexible Budget Actual Cost Variance Revenue 37116000 37476000 360000 F Flash Memory 4860000 5249000 -389000 U Application processor 1935000 1935000 0 Chip for Phone 2529000 2529000 0 Gryoscope 468000 468000 0 8 other purchased chips 12771000 12643000 128000 F Variable Supplies and tools 11257200 11305000 -47800 U Labour assembly and packaging 2358000 3092000 -734000 U Shipping 190800 191000 -200 U Total Variable Cost 36369000 37412000 -683000 U Factory rent 400000 400000 0 Machine Depreciation 150000 150000

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