Selling Price $ 125 a

Crates 1000

Revenue $ 125,000.00
COGS : $ 75,000.00
Fixed Manufacturing Cost $ 33,000.00 b
Variable Manufacturing Cost $ 42,000.00
Gross Margin $ 50,000.00
Marketing Cost : $ 32,500.00
Fixed Marketing Cost $ 15,000.00
Variable Marketing Cost $ 17,500.00
Operating Income $ 17,500.00

c
Mark up percentage, if using total variable cost as base 84.03%
Total Variable Cost $ 59,500.00
Gross Margin $ 50,000.00

Price
Variable Manufacturing Cost $ 14,960.00 220 crates
Additional Manufacturing Cost $ 4,500.00 $ 68.00 per crates

Relevant Cost to Pricing Decision

Total Cost/Crates
Variable Manufacturing Cost $ 9,240.00 $ 42
Additional Manufacturing Cost $ 4,500.00 $ 20
Total relevant Cost $ 13,740.00 $ 62

Operating Income if Accepts the Special Order : Selling Price Revenue

Revenue (Selling Price) $ 68 $ 14,960
Total Relevant Cost $ 62 $ 13,740
$ 6 $ 1,220
Recommendation is to accept special order, because it can proceed margin $ 1,220

If it's not a special order anymore

Consideration :
Capacity --> Jika kapasitas tidak cukup maka tidak menerima offering
Other Customer --> If another customer know this new customer in price $68, meanwhile they pay at regular pricing $125. Th
Other Competitor --> Don't let our regular customers switch to our other competitors.
y at regular pricing $125. They will ask the lower price
First Year ROI 12% a Revenue Per Hour that DSC must generate in the firs
Asset Investment $ 300,000,000.00 Operating Income
Normal Return 15% Total Cost
Total Revenue
First Year Operation
Hours of Service to be provided $ 25,000.00 Revenue per hour
Anticipated Variabel Cost $ 1,000.00
Anticipated Fixed Cost $ 44,750,000.00
b How to achieve ROI 15% at max price 4500
Variable Cost $ 25,000,000.00 Operating Income
Fixed Cost $ 44,750,000.00 Total Cost
Total Cost $ 69,750,000.00 Total Revenue

Revenue Per Hour

The company cannot get Roi at point of 15% with ma

Per Hour that DSC must generate in the firsdt year to achieve 12% return on Investment
$ 36,000,000.00
$ 69,750,000.00
$ 105,750,000.00

$ 4,230.00

hieve ROI 15% at max price 4500

$ 45,000,000.00
$ 69,750,000.00
$ 114,750,000.00

$ 4,590.00

any cannot get Roi at point of 15% with max price 4500, because the minimum price $4590
Development Cost $ 250,000.00
DML $ 50.00 per hour Life Cycle Revenue
Other Cost $ 300,000.00 Life Cycle Cost :
Customer Service Expense $ 250.00 per client Development Cost
Each Job 40 hours DML
Number of Client 375 client Customer Service Expense
Each Year 15,000 hours Other Cost
Billing $ 90.00 per hour Total Life Cycle Cost
Operating Income
What is estimated life cycle operating income ? Estimated life cycle operating income for both years com
 Year 1 Year 2 Total
$ 1,350,000.00 $ 1,350,000.00 $ 2,700,000.00

$ 250,000.00 $ - $ 250,000.00
$ 750,000.00 $ 750,000.00 $ 1,500,000.00
$ 93,750.00 $ 93,750.00 $ 187,500.00
$ 300,000.00 $ 300,000.00 $ 600,000.00
$ 1,393,750.00 $ 1,143,750.00 $ 2,537,500.00
$ (43,750.00) $ 206,250.00 $ 162,500.00
e operating income for both years combined $162.500 (B)
Budgeted Cost of Wilde Corporation 1
DM $ 1,125,000.00
DML $ 775,000.00
FOH Variabel $ 840,000.00
FOH Fixed $ 645,000.00
SA Variabel $ 360,000.00 2
SA Fixed $ 480,000.00
Total Cost $ 4,225,000.00

Target Operating Income $ 900,000.00

Total Revenue $ 5,125,000.00 3
Gross Margin $ 1,740,000.00
Contribution Margin $ 2,025,000.00

c
The markup percentage for setting prices as a percentage of total manufacturing costs is
Total Revenue $ 5,125,000.00
Total Man.Cost $ 3,385,000.00
Markup 51.40% (A)

The markup percentage for setting prices as a percentage of variable manufacturing costs is
Total Revenue $ 5,125,000.00
Total Var. Man Cost $ 2,740,000.00
Markup 87.04% (B)

The markup percentage for setting prices as a percentage of the variable cost of the product
Total Revenue $ 5,125,000.00
Total Variabel Cost $ 3,100,000.00
Markup 65.32% (D)

The markup percentage for setting prices as a percentage of the full cost of the product is
Total Revenue $ 5,125,000.00
Total Cost $ 4,225,000.00
Markup 21.30% (D)

Selling Price $ 60,000.00 per boats

Cost $ 46,500.00 per boats
Competitor Price $ 55,000.00
New Price $ 55,000.00
New price increase 12.50% of sales
Sales Currently 2,000.00 motor per year
Sales New Price 2,250.00 motor per year

What is the target cost for the new target price if target operating income is 20% of sales?
Number of sales (New Price) 2,250.00 boats
Sales New Price $ 123,750,000.00
Target Cost Total $ 99,000,000.00
Target Operating Income $ 24,750,000.00
Target Cost Per Unit $ 44,000.00
Lower than before $ 2,500.00

What is the change in operating income if marketing department is correct and only the sales price is changed?
Number of sales (New Price) 2,250.00 boats
Sales 123,750,000.00
Cost 104,625,000.00
Operating Income 19,125,000.00
Change in Operating Income $ (7,875,000.00)
(New Price make lower operating income than using current price)

What is the target cost if the company wants to maintain its same income level, and marketing department is correct?
Number of sales (New Price) 2,250.00 boats
Sales $ 123,750,000.00
Mantaining Operating Income $ 27,000,000.00
Total Target Cost $ 96,750,000.00
Target Cost per Unit $ 43,000.00
Lower than before $ 3,500.00
 ufacturing costs is

manufacturing costs is

le cost of the product

st of the product is

me is 20% of sales?
Number of sales (Current Price) 2,000.00 boats
Sales $ 120,000,000.00
Cost $ 93,000,000.00
Operating Income $ 27,000,000.00

rect and only the sales price is changed?

Number of sales (Current Price) 2,000.00 boats
Sales $ 120,000,000.00
Cost $ 93,000,000.00
Operating Income $ 27,000,000.00

me level, and marketing department is correct?