3.6 - 3.15: Fill in the table. Costs per [New Cost structure of the skateboards at Kann Inc. with adding CM3 model] Unit Selling Total Variable Unit Demand per Year Total Price Contribution ($) (Units) Contribution ($) Unit (= (= Sales Volume per = Gross Margin) COGS) year) 3.6) 3.9) 3.12) CK1 model $40.00 $20.00 $_ $ 3.7) 3.10) 3.13) CL2 model $60.00 $30.00 $ 3.8) $ 3.14) CM3 $80.00 $50.00 3,000 $ $_ model (New model) 3.11) 3.15) Grand N/A N/A N/A $ Total 3.16) Should Kann Inc. introduce the CM3 model? Why? (3pts) Kann Inc. manufactures and sells high quality skateboards in Northern California. Kann Inc. sold 9.000 CK1 models at $40 each and 8,000 CL2 models at $60 each last year. The company expects to launch and sell 3,000 CM3 models this year. Seventy percent of CM3 sales volume is expected to come from other models already being manufactured by Kann Inc. (50 percent from CK1 models and 50 percent from CL2 models). Kann Inc.'s CM3 would be sold to retailers for $80. CM3's variable cost per unit is $50. Kann Inc. will incur no additional fixed costs to add its new CM3 model into the line. Tips for solutions: Show all the detailed steps of assessment of cannibalization. 'First, compute the total contribution (S) of the original product line of CKI & CL2. Then, compute how many CK1 and CL2 models will be cannibalized. Then, compute the total contribution (5) for the three models altogether with the changed demands for CKI & CL2 and CM3 demand. 3.1 - 3.5: Fill in the table. [Current Cost structure of the skateboards at Kann Inc.) Unit Selling Price Total Variable Unit Demand per Costs per Unit Contribution ($) Year (Units) (= COGS) (= Sales Volume per year) Total Contribution ($) (= Gross Margin) 3.1) 3.3) CK1 model $40.00 $20.00 9,000 $ 3.2) $ 3.4) CL2 model $60.00 $30.00 8,000 $ $ 3.5) Grand N/A N/A N/A 17,000 $ (= 9,000+ Total 8,000) Kann Inc. manufactures and sells tigh quality skateboards in Northern California. Kan Inc sold 9,000 CK models ar $40 each and 8.000 CL2 models at 360 each Last year. The company expects to launch and sell 3.000 CMOS models this year. Seventy percent of CM sales volume is expected to come from other models already being m.faced Karl. (Usce lice CKI model and 30 percetilices CL2 models). Kann Inc. CM would be sold willen fut SSU. C'Evandle bust pas une $50Kama will nu se della lixei als loaden CNC model to the le Tips for wat al die stenes below. Fox.colorir pabor CRT & CL2. The COSI CXII wollen. The core access Orches llegar la CCM 21-3.5: Fill in the table. Current Cast structure of the skateboards. Kann Inci Unit Selling Total Variable Unit Demand per Total Price Costs per Unit Contribution (SJ Year (Units) Contributions COGS i-Soles vom Grosir 3.11 520.00 9,000 $ $ 3.21 3.2) CL2 model 560.00 $30,00 8.000 $ $ 3.5) Grand NA NA NA 17.0001 -- $ 8,0001 CK1 model 510.00 ..... 3.6 3.15: Fill in the table [New Cost structure of the skateboards at Koning with adding CM madell Unit Selling Total Voriobid Unit Demand per Year Total Price Costs per Contribution (s) (Units) Contribution (5) Unit is van OM 1.6) 39) 3.12) CK1 model 510.00 $20.00 $ 310) CL2 model $60.00 530.00 $ 9 3:8) CMS SR0.00 550.00 3,000 $ model (New model) 3.15) Grand NA NA $ Tata! 2.16) Should Kans Inc. introduce the CM3 model? Why? 3pts)
