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Baldwin Cycle Solution

Baldwin Cycle Solution

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Published by sindhuja21
Baldwin Cycles Case Solution
Baldwin Cycles Case Solution

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Categories:Types, Business/Law
Published by: sindhuja21 on Jun 13, 2013
Copyright:Attribution Non-commercial

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06/13/2013

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Incremental Contribution

Revenue Less Variable Cost (than shown in case) Material Cost Labor Overhead (40% is only variable) Incremental contribution Total incremental contribution

92.29 39.8 19.6 9.8 69.2 23.09 577250

Investments Variable Considered Units Raw Materials (2 months) Accounts Payable Offset (1 mnth assumed) Work in Process Finished Goods At Hi Valu Warehouse (2 months) Accounts Receivable (1 month)

4167 2083 1000 500 4167 2083

Per Unit Total 39.8 165833 39.8 -82917 54.5 54500 69.2 34600 69.2 288333 92.29 -192271

Note: 54.5 is the derivative for cost of a half complete unit, which is in progress. Calculated as = Material Cost + 1/2(Labour + Overh

Carrying Costs 23.5% of raw materials+WIP+Finished goods 23.5% on 470000 110450 Account Receivables 36100 146550

Erosion Sales per Unit Cost per unit Contribution per Unit 110 69.2 41

Cycles Lost per volume Lost Total Contribution 3000 122552 .

since in terms of materials we are complete. We take full material value.5.ost + 1/2(Labour + Overhead Cost) = 54. however since it is in .

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e complete. however since it is in progress there is half of labour and overhead cost to be incurred to complete the cycle. .

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mplete the cycle. .

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