Variable Cost and Total Contribution Essay

590 WordsMay 15, 20133 Pages
1. In question 1, I have assumed its only the Tashtego that makes the trip of Balik to Singapore and back. I have also assumed the relevant cost is the cargo cost only. Therefore, profit contribution of carrying I ton of tapioca from Balik and Singapore: Expected revenue $5.10 Less freight cost (0.25+0.56) 0.81 Profit Contibution 4.29 From Singapore to Balik: Expected Revenue $2.70 Less freight cost (0.16+0.32+0.14) 0.62 Profit Contribution 2.08…show more content…
Total contribution per round trip for each vessel Note: Cargo cost is total of ligterage, steve doring and crainage costs For Blik these costs are: (0.81*4500)=$3645 For Singapore costs are: (0.62*4500)=$2790 For Tashtego Balik-Singapore Singapore-Balik Revenue (3950*$5.10)=$20145 (3150*$2.7)=$8505 Less: total costs Ship cost(1415) (2.5*1415)=$3538 (1415*1)=$1415 Trip cost (1575+73+701)=$2349 (900+126+701)=$1727 Cargo cost

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