Last Updated 09 Apr 2020

Hilton Manufacturing Company

Essay type Research
Words 381 (1 page)
Views 190

Hilton Manufacturing Company Should Product 103 have been dropped? (3 ways to see) 1) Lost sales ($5,202) Cost savings DL $1,341 Compensation insurance 67 DM 946 Power 59 Supplies 68 2,501 Repairs 20 Lost CM: total impact of dropping ($2,701) 2) Loss eliminated Costs that remain Rent Property tax Property insurance Indirect labor Compensation ins.

Light and heat Building service Selling expense General admin Depreciation Interest Other income Total impact 3) $404 $365 78 103 448 21 20 14 917 346 713 102 (10) 3,117 (2,703) nit CM (see later) Total impact: lost CM = 5. 3909 x 510,276 = $2,702 Which product is most profitable? 101 VC DL Compensation insurance Power DM Supplies Repairs Total Selling price CM/unit CM ratio . 1164 2. 3282 . 0403 1. 3766 . 0941 .

0319 3. 9875 9. 3084 5. 3209 57% . 1137 2. 2740 . 0929 1.

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7542 . 1774 . 0557 4. 4709 9. 6900 5. 2191 53% . 1337 2.

6746 . 1171 1. 8862 . 1363 . 0396 4. 9875 10. 3784 5.

3909 52% Products 102 103 (If the plant is near capacity of available direct labor hours) CM/capacity (LH) $2. 285/h 2. 95/h 2. 016/h Which is the most profitable product depends on the decision question and the corresponding criterion 2 Should price of 101 be dropped to $8. 64? VC unit costs forecasted 1991 change DL 2. 3282 Compensation insurance . 1164 Power .

0403 Materials 1. 3766 +5% Supplies . 0941 +5% Repairs . 0319 unit costs 1992 2. 3282 . 1164 . 0403 1.

4454 . 0988 . 0319 Total 3. 9875 4. 0610 (cost increase 7% of heat and light is ignored because the increase is fixed regardless of the pricing decision) Price cash discount (1. 8%) vc unit CM x units Total CM $9. 41 0.

1016 4. 0610 5. 2474 750,000 $3,935,550 $8. 64 . 0933 4. 0610 4. 4857 1,000,000 $4,485,700 What is the minimum quantity to sell at $8.

64 to be not worse off than remaining at the $9. 41? 3,935,550/4. 4857 = 877,355 margin of safety 122,645 units What is the minimum quantity to sell at $9. 41 to be not worse off than reducing the price? 4,485,000/5,2474 = 854,842 need to sell 104,842 more units 3

Hilton Manufacturing Company essay

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Hilton Manufacturing Company. (2018, Feb 27). Retrieved from https://phdessay.com/hilton-manufacturing-company/

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