A calendar manufacture Kalenteri Oy has asked for SAMK students to help them to evaluate their current pricing structure for two of their biggest products. Until now the company has used contribution pricing, and the fixed costs have been applied to each product as a percentual estimate. But they think that there is something wrong in their product pricing and want to know the actual cost structure in more detail. The marketing manager provides the following data for you for year 2017: Budget for 2017 Estimated Overhead Ordering 120 000 Purchase requisitions Supervising 100 000 Labor Hours Packaging 150 000 Orders Driver Actual results for 2017 Actual purchase requisitions Actual labor hours Actual orders Calendar A 2 000 15 000 800 Calendar B 1 000 5 000 1 200 TASK QUESTIONS (Return you reply in Moodle): 1.) You are asked to calculate the overhead cost applied in each overhead category, using the actual results. Ordering Supervising Packaging 2.) You are asked to calculate the total overhead cost applied for each product in 2017: Actual overheads for 2017 Calendar A Calendar B Ordering Supervising Packaging 3.) Now that you solved the issues of dividing the overhead for each product, the sales manager asks you to help him with pricing. He gives you the following data: Calendar A Calendar B Sales estimate for 2018 6 400 pcs 18 000 pcs Unit variable cost 3,90 2,40 Contribution margin 40% 40% Show him your calculation and suggest him the price for each calendar. A calendar manufacture Kalenteri Oy has asked for SAMK students to help them to evaluate their current pricing structure for two of their biggest products. Until now the company has used contribution pricing, and the fixed costs have been applied to each product as a percentual estimate. But they think that there is something wrong in their product pricing and want to know the actual cost structure in more detail. The marketing manager provides the following data for you for year 2017: Budget for 2017 Estimated Overhead Ordering 120 000 Purchase requisitions Supervising 100 000 Labor Hours Packaging 150 000 Orders Driver Actual results for 2017 Actual purchase requisitions Actual labor hours Actual orders Calendar A 2 000 15 000 800 Calendar B 1 000 5 000 1 200 TASK QUESTIONS (Return you reply in Moodle): 1.) You are asked to calculate the overhead cost applied in each overhead category, using the actual results. Ordering Supervising Packaging 2.) You are asked to calculate the total overhead cost applied for each product in 2017: Actual overheads for 2017 Calendar A Calendar B Ordering Supervising Packaging 3.) Now that you solved the issues of dividing the overhead for each product, the sales manager asks you to help him with pricing. He gives you the following data: Calendar A Calendar B Sales estimate for 2018 6 400 pcs 18 000 pcs Unit variable cost 3,90 2,40 Contribution margin 40% 40% Show him your calculation and suggest him the price for each calendar
