Danshui Plant No 2Case PranavGoyal

Danshui Plant No. 2 Case Study Analysis Submitted By: Pranav Goyal

Q2) Total cost per unit can be given by: 41,140,000/200,000 = $ 205.7 Similarly actual cost per unit: 38,148,000/180,000 = $ 211.93

Q3) Please find attached the table for flexible budget and flexible budget variances in the Appendix 1.

Q4) Flash Memory: Actual Cost = $5249000; Flexible Budget 1= 4860000 (See Appendix 1); Flexible Budget 2= 181000*27 = $4887000 (1000 units extra as stated in the case that they got damaged and had to be replaced)

(In thousands $) Price Variance Flexible Budget2 – Actual 4887-­‐5249 = 362 (U) Efficiency Variance Flexible Budget1 – Flex Bud 2 4860-­‐4887 = 27 (U)

Labor: Actual Cost= $3092000; Flexible Budget1 = $2359800 (See Appendix 1); Flexible Budget2 = 181456*13.11 = $2378800

(In thousands $) Price Variance Flexible Budget2 – Actual 2378.8-­‐3092 = 713.2 (U) Efficiency Variance Flexible Budget1 – Flex Bud 2 2359.8-­‐2378.8 = 19 (U)

Fixed Manufacturing Overhead Variance = 729,000 – 736,000 = 7000 (U)

Q5) In my view, the problems that Chen is facing right now are the cost of material and the production of assembled Iphone4. The cost of material is not in hands of Chen so to increase the profitability of the firm some of the strategies