1 Breakeven - Units

Quantity % Price DM
X large 544000 0.20081210779 6.6 0.6
Large 655000 0.24178663714 6.2 0.55
Medium 1510000 0.55740125508 5.45 0.39
2709000

Basic manufacturing cost 2715310

VC 2175400
FOH 539910
Customisin 3823600
Selling 5761600
Admin 3584450

Total fixed costs 13709560

Breakeven units 2709802

3 CUSTOMER PROFITABILITY ANALYSIS

Priority Team Shop
X large 272500 166000 105500
Large 366000 186000 103000
Medium 360000 190000 960000
998500 542000 1168500

Sales Revenue 6029700 3284300 6566900

Direct Material
X large 163500 99600 63300
Large 201300 102300 56650
Medium 140400 74100 374400
Direct Material 505200 276000 494350
X large 109000 66400 42200
Large 128100 65100 36050
Medium 108000 57000 288000
Direct Labor 345100 188500 366250

No. of units dyed 750000 400000 550000

Direct cost per unit 1.4 1.4 1.4
Dying costs 1050000 560000 770000

No. of units stamped 698500 472000 1138500

Conversion cost per unit 0.4 0.4 0.4
Stamping costs 279400 188800 455400

No. of units embroidered 300000 70000 30000

Conversion cost per unit 1.3 1.3 1.3
Embroidery costs 390000 91000 39000
 Accounts maintenance 81,550 400,750 2,026,815
Sales commission - 288,080 -
Shipping activities 79,380 498,420 2,661,445
Sales visits 864,240 - -
Tracking misplaced/lost items 688,965 373,980 806,265
Marketing/promotion - 115,232 460,928
Total SDA costs 1,714,135 1,676,462 5,955,453

Profit 1,745,865 303,538 (1,513,553)

Thus it can be seen that shop customers are the least profitable. Since they are large in number and small in the sales that th
Priority customers are the most attractive, due to their low SDA

9 Women's shirts - features to be added

Target Selling price 9.75

Required Contribution 2
Target cost 7.75

Production costs(similar to medium 0.69

sized shirt
Dying 1.4
Embroidery 1.3
SDA expenses 3
Additional selling costs 1
Total cost without features 7.39
Cost after addition of feature
Inside hanger 0.02 7.41
Outside hanger 0.04 7.45
Patch pocket 0.1 7.55
Double stitching 0.08 7.63
Single sleeve embroidery 0.25 7.88

Therefore, importance wise, all features but the single sleeve embroidery should be added.
DL Variable cost Contribution Margin(CM) WCM Total VC
0.4 1 5.6 1.124547803618 544000
0.35 0.9 5.3 1.281469176818 589500
0.3 0.69 4.76 2.65322997416 1041900
5.059246954596 2175400

ABC ANALYSIS
Customer related activities S&D expenses Admin expenses
Accounts maintenance 0% 70%
Sales commission 5% 0%
Shipping activities 50% 10%
Sales visits 15% 0%
Tracking misplaced/lost items 20% 20%
Marketing/promotion 10% 0%

S&D expenses 5761600

Admin expenses 3584450
in € S&D expenses Admin expenses Total
Accounts maintenance 0 2509115 2509115
Sales commission 288080 0 288080
Shipping activities 2880800 358445 3239245
Sales visits 864240 0 864240
Tracking misplaced/lost items 1152320 716890 1869210
Marketing/promotion 576160 0 576160
Cost driver quantity
Customer related activities Assumed cost driver Priority Team
Accounts maintenance No. of orders received 2330 11450
Sales commission To team customers 0 100%
Shipping activities No. of shipments 1470 9230
Sales visits To priority customer 100% 0
Tracking misplaced/lost items No. of units sold 998500 542000
Marketing/promotion 20% team, 80% shop customers 0 20%

Percentage allocation
 Customer related activities Assumed cost driver Priority Team
Accounts maintenance No. of orders received 3% 16%
Sales commission To team customers 0% 100%
Shipping activities No. of shipments 2% 15%
Sales visits To priority customer 100% 0%
Tracking misplaced/lost items No. of units sold 37% 20%
Marketing/promotion 20% team, 80% shop customers 0% 20%

umber and small in the sales that they produce per shop, therefore they have significant account maintenance and shipping costs.
st attractive, due to their low SDA expenses and higher sales revenue.
 9346050
driver quantity
Shop
57909
0
49286
0
1168500
80%

ntage allocation
Shop
81%
0%
82%
0%
43%
80%
2