Danshuiplant Case Study

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Case Study 2 Danshui Plant Lin Wang Stephannie Vargas Corinne Vancol Macarena Valdez Jason Umberfield Nicholas Weiler Managerial Accounting June 20, 2013 Answer #1: Total expected cost per iPhone4, if all manufacturing and shipping costs (both variable and fixed) was allocated to planned production: Variable Cost per unit = Bill of Materials + Labor + Shipping = $187.89 + $13.11 + $1.06 = $202.06 per unit Total Fixed Cost = $729,000 (given) # of units budgeted = 200,000 units (given) Fixed Cost per unit = $729,000 200,000 Fixed Cost per unit = $ 3.6450 per unit Budgeted Cost/unit = $202.06 + $3.6450 Budgeted Cost/unit = $205.7050 per unit Total actual cost (production and shipping) per unit of iPhone 4: Total Actual Cost = $38,148 (given) # of units = $180,000 (given) Actual cost per unit = $38,148 $180,000 Actual cost per unit = $ 211. 7050 per unit Answer #2: Amount of iPhone 4 that would be neded for Danshui Plant No.2 to break even: Break even = Fixed Costs CM/unit Price = $41,240,000 $200,000 Price = $ 206.20 Variable cost/unit = $40,411,000 $200,000 Variable cost/unit = $ 202.0550 CM/unit = Price - Variable Cost/unit = $206.20 - $ 202.0550 CM/ unit = $ 4.1450 per unit Break Even = $729,000 $4.1450 Break Even = $175,874.5476

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