Felicia Coates
University of Virginia
Darden Graduate Business School
September 15, 2008
Edward Giberson
Giberson’s Glass Studio
Owner
Dear Mr. Giberson:
I appreciate an opportunity you provided for me to observe and analyze a production process at your studio. I would like to share with you my observations and recommendations.
There are four products you produce at the studio: Patterned glasses, Paperweights, Wrapped tumblers and Vases. Based on amount of a batch mix and average number of units produced, I calculated Direct Materials per Unit as following:
Item Direct Materials Cost per Unit, $ Patterned glasses 0.29
Paperweights 0.52
Wrapped tumblers 0.29
Vases 0.35
I also measured an amount of
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Then, you will have to organize you time better and rearrange the idle periods to locate additional 10.5 hour ((64 minus 43)x1/2 hour) per month for blowing and finishing additional Vases. Patterned glasses Paperweights Wrapped tumblers Vases Total per Bundle Expected Monthly Sales, Units 78 0 130 94 302 Selling Price $9.00 $15.00 $8.00 $25.00 Expected Monthly Revenues $702.00 $0.00 $1,040.00 $2,350.00 $4,092.00 Less Variable Costs
Direct Labor 585.00 0.00 975.00 1175.00 2,735.00
Direct Materials 22.62 0.00 37.70 32.90 93.22 Contribution Margin $94.38 $0.00 $27.30 $1,142.10 $1,263.78 Total Monthly Fixed Costs 1,265.00 Breakeven Point in Bundles: 1.00
In this case, you will be able to cover all of your fixed costs only by changing of sales mix, without changing the prices. Please keep in mind that you have some more variable operating costs, not covered by this calculation (see Table on p. 2). They can amount to more than $1,000, if you add depreciation for equipment and truck.
Book Value Life, years Monthly Depreciation Charge
Furnace & Ovens $5,000.00 2 $208.33
Equipment & Gas Tanks $3,400.00 8 $35.42
Truck $8,500.00 5 $141.67 Total: $385.42
Add also another $38.33 per month as average monthly interest payment for your truck loan.
So, I would plan for at least $2,500 for a Target
Maureen is often forgotten throughout the entire story of The Glass Castle written by Jeannette Walls. We are very tragically reminded of Maureen’s presence when she stabs her own mother while living in New York. Reflecting back to the beginning of the story, we can see why Maureen has a mental breakdown. She is born into a world of violence, her parents fail to care for her, and she lives her entire childhood in neglect.
($372 + $135 + 500) / ($2.21 - ($0.83 + .40)) = 1,028 [+/- 31]
If the company decided to sell the new product at price of D.Cr. 8.20, that means the full fixed expense of 1.20 is covered and the company will make high profit. However, the selling price of D.Cr. 8.20 is very high and under this price the company will sell the new product at a lower volume than what the company planned sale volume in the budget and that will affect the company in the market as a strong competitor in the food manufacturing. According to the case, the company sales volume drop to 30 tons when the product was sold at the price of D.Cr. 8.2. Thus, my recommendation are as follows:
The primary issues in the Giberson’s Glass Studio case revolve around simple costing structure problems. Giberson does not have the correct knowledge about what each of his products is costing him, thus his ability to derive how profitable each of his product lines is severely hindered. Having no basic cost structure brings many problems to all lines of business and causes inefficient allocations of funds and removes the ability to bring about the maximum level of profits that each business desires. Under periods of financial distress Giberson without these product costs is unable to restructure his business model around his biggest “money makers” and can’t remove the products that are no longer profitable and are holding the business back.
Note: You can assume that variable costs are constant so that the average of them is the variable cost relevant for a change in sales.
As I read the Glass Castle, the way Rose Mary behaves, thinks and feels vary greatly and differently throughout the memoir. The immediate question that pops up in my mind is to ask whether Rose Mary carries some sort of mental illness. Fortunately, given the hints and traits that are relevant to why Rose Mary lives like that in the memoir, we, the readers, are able to make some diagnosis and assumptions on the kind of mental illness she may carry. To illustrate, one distinctive example is when Rose Mary blames Jeannette for having the idea to accept welfare. “Once you go on welfare, it changes you. Even if you get off welfare, you never escape the stigma that you were a charity case.” (188). In my opinion, Rose Mary is being nonsense and
One of the major benefits of expansion is the reduction of fixed cost (fixed and selling). The cost is absorbed by 85,000 units instead of 80,000 units resulting in saving of $0.42 per unit.
a. How much would the payment be if rate of interest is 5% and you only financed the truck for 48 months?
= Unit Selling Price – Unit Variable Cost = $9.00 – ($1.25 + $0.35 + $1.00) = $6.40
The revenue is $600,600*1.2= $720,720. The variable cost changes as sales increases and fixed cost stays the same, the gross profit is $175,500. After tax, the net income is $100,557.
We appreciate your interest at working here at ACME Products and have received some strong feedback from your recent job interview. We interview hundreds of people here at ACME and only a select few can meet the rigid standards here at the company. I learned much from our discussion and thank you for your time.
The book ,Throne of Glass, which was authored by Sarah J. Maas, is a novel that was inspired by “Cinderella” which was created by Disney. The book tells the story that follows a young assassin that is only a teenager, whose name is Celaena Sardothien. The book starts of with Celaena Sardothien being imprisoned in the kingdom of Adarlan, a corrupt place, by orders of the king, who is a tyrannical ruler, and was given an offer by the king’s son, Dorian, to become the king’s champion by competing against other thieves and assassins to gain her freedom. Along the way of rebuilding her body to its former glory after serving a year as prisoner, she forms relations with other people like Dorian, the crown prince who is nothing like his father, Chaol,
This allows Maria to meet the exact sales target for the month and earn an overall operating profit. If the break-even point for the new facility increases to 650,000 packs instead of 535,000 packs, the existing facility would be forces to reduce volume as producing at maximum capacity would exceed the monthly production target. The increase in the break-even point means that there will also be increase in variable costs. Although Maria would still be making a profit, she would not be maximizing her profit making ability. Since the contribution margin still allows fix cost to be covered, leaving the firm with a profit, Maria should still purchase the plant.
Each unit of product requires three pounds of direct material. The company's policy is to begin each quarter with an inventory of direct materials equal to 30% of that quarter's direct material requirements. Budgeted direct materials purchases for the third quarter would be:
One of the most used materials in human history is glass or more specifically silicate glass. Although some types of glasses are called crystal glass, glass is actually an amorphous solid and does not have a crystal structure. It is used in all walks of life ranging from homes to automobiles to laboratories. Historically, the one of the first types of glass that was used by humans to make tools and weapons was the volcanic glass known as obsidian. As for manmade glass, the earliest accounts date back to 5000 BC in the middle east. Primitive methods of glass making were used until about 100BC, when glassblowing was believed to be discovered. This discovery made glass products popular in the Roman Empire since the development of glassblowing allowed glass production to be more efficient and thus less expensive. As the centuries went on more techniques were developed which eventually lead to glass products being widespread. This paper will discuss some of the methods of glass production throughout history, the types of silicate glass, and the different ways that glass can be colored.