Essay Danshui Plant No.2 Case Study
Due Date: April 9, 2013
1. As we can see from the Exhibit 1, 176,087 Apple iPhone 4’s would have to have been completed for Danshui Plant No.2 to break even.
2. The total expected cost per unit was $205.7 per unit and the actual cost per unit was $211.93 per unit. See Exhibit 2.
3 & 4. The data is showing in the Exhibit 3 & 4.
5. From the data of question 3, the variance of revenue is favorable because Apple increased price of flash memory by $2. However the company didn’t gain profits from the revenue due to the increased price of flash memory provided by Samsung. The variance of flash memory is unfavorable because of two reasons: first reason is the price of each unit …show more content…
Exhibit 1: Revenue | 41,240/200=$206.2 per unit | Variable Costs | 187.89+13.11+1.06=$202.06 per unit | Contribution Margin | 206.2−202.06=$4.14 per unit | Fixed cost | $729,000 per month | Break-even | 729,000/4.14=176,087 units |
Total Expected Cost per unit= 41,140,000/200,000=$205.7 per unit
Actual Cost per unit= 38,148,000/180,000=$211.93 per unit
Actual Price: 5,249,000/181,000=$29
Standard Price: $27
Actual Quantity: 181,000 units
Standard Quantity: 180,000 units
Price Variances for Flash Memories= (Actual Price – Standard Price) × Actual Quantity =