STYLE:INC CASESTUDY

Retail selling price

% of total sales
Tailoring costs
Shipping costs
Contribution per Unit
Targetted contribution
N0.of units required to be sold
Rounded up

particulars
Total sales
% of sales
Amount of sales

number of units to be sold*selling price per unit=targetted contribution

After discontinuing the classic shirt line,the estimation is as follows

Total sales
% of sales
modified sales volume in amt

particulars
selling per unit
Tailoring costs
Shipping costs
Contribution per Unit
contribution rate %
varriable cost rate

contribution rate

price increase option

particulars

Total sales
% of total sales
Amount of sales
contribution rate %
contribution amount

particulars
selling price per unit
varriable cost per unit
Contribution per Unit
contribution rate %
annual contribution on total sales of product line

particulars
existing amount of total sales
%of projected sales

break even analysis analysis without the classic shir product line
particulars
weighteged average retail selling part
weighteged average contribution
weighteged average contribution margin
 additional fixed cost
target margin from discontued product
total amount to be recover
break down sales to recover

1st decison on contuning of product

reason for the decision
2nd best alternative solution taken
hint for the alternate solution from the case
why additional cost of marketing cannot be allocated for discontinued product
final solution arrive and the logic for the expliation

in the x
 Determination of financial viabil

Dress shirt product lines

Classic shirt Premium shirt
75 95
5 15
7.5 9.25
48.5 58.75
$19 $27
25000 25000
1315.7895 925.9259
1315.8 926

Estimation based on history

Classic shirt Premium shirt
$600000
5% 15%
30000 90000

98685 87970

Premium shirt Executive shirt

600000
5% 15%
94736.8421052632 104210.52631579

Classic shirt Premium shirt

75 95
7.5 9.25
 48.5 58.75
$19 $27
25.35% 28.42%
74.67% 71.58%

25.33 28.42

Classic shirt Premium shirt

$600,000
5% 15%
30000 90000
25.35% 28.42%
7599 25578

price increase option

existing assume -1
$75.00 $90.00
$56.00 $56.00
$19.00 $34.00
25.33% 37.78%
$7,600.00 $11,333.33

Premium shirt
$90,000.00
15.79

amount
$473.68
$299.95
63.32%
 $5,000
$7,600
$12,600.00
$19,898.23

discontinue

redistribution of contribution of remaning product line

in the case mentioned
there is not happening activity n that product line so cost cannot be allocated
it is found that the break even sale 19898.29$ the additional costr of 2
ermination of financial viability of products

Suit Product lines

Executive shirt Coat Classic Suit Premium Suit Executive suit
125 395 475 625 850
15 10 15 15 25
10.75 28.35 125.5 129 33
69.25 181.65 163.5 186 211
$45.01 $185 $286 $410 $605
25000 25000 25000 25000 25000
555.4938 135.135 87.41 60.9756 41.32
555.5 135.2 87.5 61 41

on based on history
Executive shirt Coat Classic Suit Premium Suit Executive suit
00000
15% 10% 15% 15% 25%
90000 60000 90000 90000 150000

69437.5 53404 41562.5 38125 34850

Coat Classic Suit Premium Suit Executive suit

15% 10% 15% 15%

Executive shirt Coat Classic Suit Premium Suit Executive suit

125 395 475 625 850
10.75 28.35 125.5 129 33
 69.25 181.65 163.5 186 211
$45 $185 $286 $410 $605
36% 46.84% 60.21% 65.60% 71.18%
64% 53.16% 39.79% 34.40% 28.82%

36 46.84

Executive shirt Coat Classic Suit Premium Suit Executive suit

15% 10% 15% 15% 25%

90000 60000 90000 90000 150000
36% 46.84% 60.21% 65.60% 71.18%
32400 28104 54189 59040 106770

crease option
assume -2
$100
$56
$44.00
44.00%
$13,200.00

Executive shirt Coat Classic Suit Premium Suit Executive suit

$90,000.00 $60,000 $90,000.00 $90,000.00 $150,000.00
15.79 10.53 15.79 15.79 26.32