Bilston case study Essay Example | Topics and Well Written Essays - 1000 words

Bilston case study - Essay Example. In addition, the caller-up must characterized some of the costs as frigid costs. The fixed cost are electricity, general and administrative, rent, depreciation expense, interest expense, and other factory costs. The keep companionship must some fo the costs as fixed costs. The variable cost are labor cost, desolate materials, and repairs (Abele 2008). II. The standard contribution marging includes the variable costs and the fixed costs elements. evade 1 shows that the contribution margin for the wood screws is .0117. This is arrived at by deducting the variable costs from the revenues. The variable costs are the labour cost, raw materials costs, and the repairs costs. Table 2 shows that the contribution margin for Self Taffers is 0.0251. This is arrived at by deducting the variable costs from the revenues. The variable costs are the labour cost, raw materials costs, and the repairs costs. Table 3 shows that the contribution margin for the wo od screws is .0118. This is arrived at by deducting the variable costs from the revenues. The variable costs are the labour cost, raw materials costs, and the repairs costs. Display of the social clubs Profit and sacking account for 2009 in contribution format. Table 4 shows that companys profits and loss account for 2009 for its wood screws products. The company generated profit of 295 for the said year. Table 5 shows the revenues of its self taffers products for the year 2009. Table 6 shows the companys Nuts and Bolts divisions profits and loss account for 2009 for its wood screws products. The company generated a loss of (219) for the said year. Table 6 shows the revenues of its self taffers products for the year 2009. The above discussions show that the company did not make love well in the two remaining product lines. On the other hand, the company did well in one of the three products scrutinized (Besley, 2008). III. Discussion of the companys proposal to drop one of its fa iling products. Starting in January 2010 (based on 2009 figures). The company should not drop the nuts and bolts in January 2010 if the basis for the dropping is the 2009 one-year income statement result. Continuing with production of the nuts and bolts generates a lesser loss of only 219.00 However, dropping the nuts and bolts section of the companys production subdivision would force the company to continue paying the fixed expenses. The fixed expenses are higher than the net loss of only 219.00 (Dubrin, 2008). IV. Discussion on whether the company should lop prices of the wood screws to ?2.25 in the second half of 2010. The company should drop the price from to the lower 2.25. The lower price will generate a higher leger of revenues from 750 units to the higher 1,000 units. In addition the results of operations at 2.25 is higher than the results of operations for the prior higher selling price of 2.45 (Khan, 2006). V. The companys total company profit forecast for second half 2010 assuming the price of woodscrews is dropped to ?2.25, again taking account of the variances. Table 7 shows that companys woodscrews products will be sold at a lower selling price of ?2.25. The table 7 financial statement shows that reducing the price from 2.45 to 2.25 is a good wariness decision. The reduction in the selling prices generates an in crease in the revenues by 250,000 units. The results of operations for the 2.25 price is better than the result sof operations pegged at 2.45 price (Moyer, 2009). IV. keen-sighted term prospects for Bilston.The fixed