Unit 6 blog

Rinske

Hi Rob,

It seems like a nice example. I think the best thing to do is to look at all the costs separately and work out each one separately first and then adding them up for the total production:

The variable material cost for the current production is 255. This will be reduced with 10% if they would manufacture 100 machines.
To work out the cost for 100 machines you would use the current production cost of 255 - 10%, which is the new price per unit.
The other variable costs don't seem to change, so the unit price would stay the same.

For the fixed marketing and the fixed general overheads, you calculate the total amount for producing 80 machines (current production) for each cost, add the price increase to it (1000 each) and to come at the new unit price, you then divide it with 100 machines (new production amount) to find the amount per machine.

If you work them all out separately and then list them together in a table per unit or per 100 units, this should show the new price and contribution.

Does that help at all?

Rinske

SandyHood

Rob
This is from an old skills test.
I set this question as homework for my Thursday morning class, and thjey hand it in on Thursday
for that reason I don't want to post my answer here
I will produce an answer this afternoon, and if you email me with the subject line:
Fine Turf task 10
I have set up an out of office reply to let you have my answer by reply

this way I'll have a rough idea of who has had copies

Please confirm if this figure is correct:

fixed general o/heads will increase by 1000 a month

I think it should be £1,300

Rinske

O.o I should shut up and not try to explain stuff if you are still going through it with your class!

O well, at least I didn't post the end figures, as I am too lazy to work it out myself!

SandyHood

Rinske
You are fine

Incidentally my sheet prints off as a single sheet portrait if you shrink to fit - and even I can read it
There are annotations and arrows to help you see where the numbers come from

Sandy

valentino46

ooops!!

sandy i offer my apologies for posting the question, would you like me to remove it? i dont usually go to indepth with my queries so as to not try and leak any kind of answers.

rob

SandyHood

Rob
No problem and I am fine with Rinske's response

I just didn't want to publish my own (just yet)

Sandy