------------------------------------------------- G R O U P C A S E 3: H O S P I T A L S U P P L Y‚ I N C Given Information: Hospital Supply‚ Inc.’s Normal Volume (in units per month) | 3‚000 | Regular Selling Price (per unit) | 4‚350 | Costs per Unit for Hydraulic Hoists | | | Unit Manufacturing Costs: | | | Variable Materials | 550 | | Variable Labor | 825 | | Variable Overhead | 420 | | Fixed Overhead
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Question 1: i. Fixed Cost = ($660 + $770) x 3‚000 units = $4‚290‚000.00 Variable Cost = $550 + $825 + $420 + $275 = $2‚070 Total Variable Cost = $2‚070 x $3‚000 = $6‚210‚000.00 Unit Contribution Margin = Sales – Variable Cost = $4‚350 – $2‚070 = $2‚280 ii. Contribution Margin Ratio = Total Variable Cost Total Sales = $2‚280 x 3‚000 $4‚350 x 3‚000 = 0.524137 iii. Break even volume in units = Total Fixed Cost Unit Contribution Margin = $4
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| Costs per Unit for Hydraulic Hoists | | | | Unit Manufacturing Costs | | | | | | | | Variable Materials | | $550 | | | | | | Variable Labor | | | 825 | | | | | | Variable overhead | | 420 | | | | | | Fixed overhead | | | 660 | | | | | | Total unit manufacturing costs | | | $2‚455 | | | | | Unit Marketing Costs | | | | | | | | Variable | | | 275 | | | | | | Fixed | | | 770 | | | | |
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Hospital Supply Inc.: A quantitative analysis I. Introduction: Hospital Supply‚Inc.‚produced hydraulic hoists that were used by hospitals to move bedridden patients. The costs of manufacturing and marketing hydraulic hoists at the company’s normal volume of 3‚000 units per month are shown in Exhibit 1. EXHIBIT 1: Cost per unit for hydraulic hoists Unit manufacturing costs: Variable materials $550 Variable labor 825 Variable overhead 420
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Case 16-1: Hospital Supply‚ Inc. Question 1: Total fixed costs (TFC) = fixed costs per unit times normal volume =($660 + $770)*3‚000 = $4‚290‚000. Contribution margin per unit = unit price minus unit variable costs = $4‚350 - $2‚070 = $2‚280. $4‚290‚000 Break - even volume = ------------------ = 1‚882 units $2‚280 Break - even sales =1‚882 units x $4‚350 = $8‚186‚700 Question 2: Effects on monthly shares‚ costs and income. [pic]
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INTRODUCTION The case is about manufacturing company‚ Hospital Supply‚ Inc.‚ that produced hydraulic hoists for the local market. The hydraulic hoist is useful to the hospital for moving bedridden patients. Most of sales made to local hospitals. Significant to activity of sales and production of hydraulic hoist‚ there are costs incurred due to the consumption of resources. Presented in Exhibit 1 are the costs of manufacturing and marketing hydraulic hoists at the company’s normal volume of 3‚000 units per
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fostering the relationships with my family and my husband’s family. I will be involved in the community‚ helping to ensure safe environment for my future children. Regarding my career‚ I hope to possess a supervisory or specialist role at Company‚ Inc.‚ which is the company for whom I currently work. I intend to be holding a role with increased responsibility and many leadership opportunities. In ten years I intend to be continuing to cultivate a loving relationship with my husband and children
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– Jolson Automotive Hoist Problem: How should Jolson Automotive increase its sales. Alternatives: 1. Do nothing. 2. Get U.S. Wholesalers to “push” the Jolson Lift and establish NY sales office. 3. Enter into a licensing option with French firm Bar Maisse. 4. Enter into a joint venture with Bar Maisse. 5. Directly invest in the German market without the help of Bar Maisse. Recommendation: Alt. 1 (Do nothing) --- REJECT: Mark Jolson wants to expand‚ he just doesn’t know where. Alt
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Problem Statement: Camar Automotive Hoist (CAH) produces top quality automotive hoists. The company is currently faced with making a critical decision which may significantly effect its future operations and long term competitiveness. The president‚ Mark Camar has just received a proposal about the option to enter into the European market‚ prepared by the Camar marketing manager. Mark Camar must decide on a course of action that will maximize profits and keep risk to a minimum level. Issues:
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File-It Supplies Inc‚ Present Situation Patsy Akaka is the marketing manager of File-It Supplies which is a file folder manufacturer that has been in business for 28 years. Other primary lines they are file markers‚ labels and indexing systems. On the other hand 40% of FIS´s file folder business is in specialized lines including oversized blue-print and engineer drawings for several high tech industries. Even though the company has a unique knowledge in the field‚ Patsy is facing a complicated
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