Dansk Minox Case

DANSK MINOX

Team Member: MingJia Shen, Jie Yin, Shao Yu

Question 1:
The impact on profit in 1966(before taxes) of selling 30 tons at a retail price of Cr. 8.2 is the Contribution Margin
Contribution margin = revenue - variable costs
Price to Dansk Minox 5.26
Incremental Cost 3.23
Less: Transportation, storage (.20) Labor (.50) 2.53
Profit Contribution 2.73
Volume 30 tons (30,000 Kg)
Contribution Margin( 2.73×30,000) 81,900

Question 2:
The impact on profit in 1966(before taxes) of selling 85 tons at a retail price of 6.85
Price to Dansk Minox 4.40
Incremental Cost 3.23
Less: Transportation, storage (.20) Labor (.50) 2.53
Profit Contribution 1.87
Volume 85 tons (85,000 Kg)
Contribution Margin( 1.87×85,000) 158,950

Question 3:
When retail price is 6.85, it would produce more incremental profit (77050) for the firm than price 8.2 in 1966,
158950-81900 = 77050

Question 4:
81,900 = 1.87×Volume
Volume = 81900/1.87 = 43796kg
When sales volume is 43796kg at retail price of 6.85, the profit impact is same as selling 30 tons at retail price of 8.2.

Question 5:
Total unit cost = Total Variable Cost + Production Fixed Expenses + Advertising Expense + Selling and Administrative Expense = 3.23 + 1.2 + 0.3 + 0.19 = 4.9

Per unit profit for 1 Kg of "complete meal" = Price to DM - Total unit cost= 4.4 - 4.92 = (0.52)

Question 6:
When the Consumer Price is 8.2

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