3.

Economic tables
Table A1: Price of material

Price of Price of
Type of Cost of material material for material for no
product Material type Weight per kg product of units
Engine block Aluminum A356 0.4762 16.84 8.019208 4009604
Rod Cast iron 0.10227 9.44 0.9654288 482714.4
Piston Cast Iron 0.19928 9.44 1.8812032 940601.6

Table A2: Manufacturing processes

Part name Process name Time needed Cost per h Total cost
Engine block Sand casting 0.5 250 125
Grinding 0.25 300 75
Polishing 0.25 300 75
Total 275
Total annual 137500000
Rod Forging 0.25 250 62.5
Cutting 0.1 225 22.5
Grinding 0.1 225 22.5
Polishing 0.1 225 22.5
Total 130
Total annual 65000000
Piston Cutting 0.05 225 11.25
Forging 0.1 250 25
Turning 0.1 200 20
Drilling 0.05 225 11.25
Turning- finishing 0.05 200 10
Total 77.5
Total annual 38750000

Table A3: Final variable cost

Type of product Unit variable cost Annual variable price

Engine block 283.019208 141509604
Rod 130.9654288 65482714.4
Piston 79.3812032 39690601.6
Total 493.36584 246682920

Table A4: Fixed cost

Fixed Cost Per month Per year

 Insurance 985000
Salary (excl. Manufacturing) 1000000 12000000
Rent 7000000
Molds 15000
Total 20000000

Table A5: Total cost of producing

Overhead absorption rate 40

Type of procuct Cost per unit Annual price
Engine block 296.3525413 148176270.7
Rod 144.2987621 72149381.07
Piston 92.71453653 46357268.27
Total 533.36584 266682920

Table A6: Selling price and profit calculus

Type of
the Sale No of Variable Contribution Variable cost
product price units Revenue cost Fixed cost margin Profit per Unit
Engine
block 420 500000 210000000 141509604 6666666.667 68490396 61823729.33 283.019208

Rod 190 500000 95000000 65482714.4 6666666.667 29517285.6 22850618.93 130.9654288

Piston 110 500000 55000000 39690601.6 6666666.667 15309398.4 8642731.733 79.3812032

Table A7: Break-even points

Type of product Unit sold Revenue Fixed Cost Variable cost Total costs
Engine block 0 0 6666666.667 0 6666666.667
100000 42000000 6666666.667 28301920.8 34968587.47
200000 84000000 6666666.667 56603841.6 63270508.27
300000 126000000 6666666.667 84905762.4 91572429.07
500000 210000000 6666666.667 141509604 148176270.7
BE point: 48668.62404
Rod 0 0 6666666.667 0 6666666.667
100000 19000000 6666666.667 13096542.88 19763209.55
200000 38000000 6666666.667 26193085.76 32859752.43
300000 57000000 6666666.667 39289628.64 45956295.31
500000 95000000 6666666.667 65482714.4 72149381.07
BE point: 112928.1797
Piston 0 0 6666666.667 0 6666666.667
 100000 11000000 6666666.667 7938120.32 14604786.99
200000 22000000 6666666.667 15876240.64 22542907.31
300000 33000000 6666666.667 23814360.96 30481027.63
500000 55000000 6666666.667 39690601.6 46357268.27
BE point: 217731.177

Table A8: Gross margin

Type of the product Gross profit Revenue Gross margin

Engine 123.6474587 420 29%
Rod 45.70123787 190 24%
Piston 17.28546347 110 16%
Total 186.63416 720 26%
Total for units 93317080 360000000 26%

Table A9: Financial statement

Revenue 360000000
Cost of sales -246682920
Gross profit 113317080
Less:administartion and
finance expenses -20000000
Profit before tax 93317080
Danish VAT tax - 25% -23329270
Profit after tax 69987810
Operating margin 26%
Overhead/sales 6%