Cumberland Metal Industries A Free Essay, Term Paper and Book Report
We started by calculating the contribution provided by the three parts in the case of Alpha for the model year 1975 for each part respectively. The contributions of parts A, B and C were as follows:
Total Variable cost Price Contribution projected Units % contribution to sales
0.362 0.6 0.238 3300000 0.396667
0.423 0.8 0.377 1000000 0.47125
0.523 1 0.477 400000 0.477
Then we found the actual cost that CMI incurred in the case of beta and the actual contribution what CMI earned after changing the material from Copper-flashed Nickel to Stainless steel. The contributions for model year 1975 are as follows:
Part Total variable cost Price Contribution Projected Units %Contribution of sales
A 0.34 1.23 0.89 2400000 0.72
B 0.40 1.26 0.86 800000 0.69
C 0.49 1.32 0.83 300000 0.63
The total variable cost was arrived at by using exhibit 4. In this we found the total cost incurred in material of Beta, which comes out to be $ 5.07 million. Now, divide this by the per pound cost of copper flashed nickel which is around $ 15, which will give you the total quantity of material use......
Word Count: 506
Page Count: 2 (250 words a page / double spaced)
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