BALDWIN BICYCLE

Additional CM
SP 92.29
DM 39.8
DL 19.6
V.OH 9.8
Additional CM 23.09
SP. Order 25000
Total Additional CM 577250

Opportunity Cost
Using Baldwin cost structure
SP 110.1
Total VC 66.55
CM Lost 43.5
Units 3000
Total CM Lost 130488

Cost of Sales 8045000.0

V.OH 968151.8 9.8
F.OH 1470000.0
Total OH 2438151.8
DL 1936303.6 19.6
DM 3670544.6
DM pu 37.15
66.55

Cost of Capital
Cost of Capital is assumed at 14%
DM 23217
WIP 7630
FG (B) 4844
FG (HV) 40367
Acc Rec 26918
TOTAL 102975

Additional CM 577250
less: CM LOST 130488
less: Cost of Capital 102975
Net Additional CM 343787

Existing Sp.Order
Units Units Total
Sales 95791 10541848 25000 2307250 12849098
VC 6375336 1730000 8105336
CM 4166512 577250 4743762
Additional Cost of Capital 0 102975 102975
FC 1470000 0 1470000
Other Expenses 2354000 0 2354000
Profit 342512 474275 816787

Existing Profit 473000

Change in Profit 343787