Question

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Posted on Jul 13, 2024

1. Sale price (revenue) for each unit is $300,000 for Q1 through Q3 of sale. However, for Q4 it is discounted 10% to $270,000 to

1. Sale price (revenue) for each unit is $300,000 for Q1 through Q3 of sale. However, for Q4 it is discounted 10% to $270,000 to clear out remaining inventory for updated home models. 2. Manufacturing costs for LV are constant at $250,000 per unit for all quarters. 3. Inventory costs are 4% of the dealer manufacturing price of the model unit per quarter held over, i.e., 0.04 x $250,000 = $10,000 inventory fee per quarter per unit. These are additional costs for LV to consider and impacts to both the manufacturing budget and profit margins of each unit sold. 4. It is assumed that LV will not manufacture any units beyond 04-all units made in any quarter must be sold no later than Q4. LV typically brings out fresh" model designs every 12 months with new engineering and design component features that keep them as industry award winners. Resource Mfg budget Advertising budget Mfg hours Demand units Min production units Q1 Q2 Q3 Q4 $12,000,000 $15,000,000 $15,000,000 $4,000,000 $60,000 $75,000 $75,000 $40,000 60,000 60,000 30,000 40 60 80 50 30 30 1 30 10 Advertising costs/ unit Mfg hours/units 1,250 1,200 Figure 1. LV Resources Note: Xij-number of LV units manufactured in ith quarter and sold in " quarter, e.g.X23=number of LV homes manufactured in quarter 2 and sold in quarter 3. Question 3 What is the profit contribution of models sold in Q3? 50,000X13+ 40,000x23 + 30,000X33 50,000x33 + 10,000X34 30,000X13 + 40,000x23 + 50,000X33 no answer available 1. Sale price (revenue) for each unit is $300,000 for Q1 through Q3 of sale. However, for Q4 it is discounted 10% to $270,000 to clear out remaining inventory for updated home models. 2. Manufacturing costs for LV are constant at $250,000 per unit for all quarters. 3. Inventory costs are 4% of the dealer manufacturing price of the model unit per quarter held over, i.e., 0.04 x $250,000 = $10,000 inventory fee per quarter per unit. These are additional costs for LV to consider and impacts to both the manufacturing budget and profit margins of each unit sold. 4. It is assumed that LV will not manufacture any units beyond 04-all units made in any quarter must be sold no later than Q4. LV typically brings out fresh" model designs every 12 months with new engineering and design component features that keep them as industry award winners. Resource Mfg budget Advertising budget Mfg hours Demand units Min production units Q1 Q2 Q3 Q4 $12,000,000 $15,000,000 $15,000,000 $4,000,000 $60,000 $75,000 $75,000 $40,000 60,000 60,000 30,000 40 60 80 50 30 30 1 30 10 Advertising costs/ unit Mfg hours/units 1,250 1,200 Figure 1. LV Resources Note: Xij-number of LV units manufactured in ith quarter and sold in " quarter, e.g.X23=number of LV homes manufactured in quarter 2 and sold in quarter 3. Question 3 What is the profit contribution of models sold in Q3? 50,000X13+ 40,000x23 + 30,000X33 50,000x33 + 10,000X34 30,000X13 + 40,000x23 + 50,000X33 no answer available