Exhibit 1 Product Class Cost Analysis Normal Year Total All Products Product A Product B Product C Sales at full capacity (units) 2,000,000 Actual sales volume (units) 1,500,000 600,000 400,000 500,000 Unit sales price $ 7.20 5 10.00 $ 9.00 5 240 10 Total sales revenue $ 10,800,000 $ 6,000,000 $3,600,000 $ 1,200,000 11 Variable cost per unit $ 2.80 $ 3.39 $ 112 Total variable cost per unit $ 4,284,000 $ 3.75 $ 2,034,000 $ 1,500,000 $ 150. 750,000 12 Fixed costs $ 34. Profit $ 2,970,000 $ 900,000 $ 3,546,000 $ 3,006,000 $ 1,560,000 $ 540,000 450,000 0 15 Ratio: 16 Variable cost to sales 0.396666667 17 Unit contribution to sales Utilization of capacity 0.603 75% 0.34 0.66 0.42 0.63 30% 0.58 20% 0.375 25% 19 20 23 22 Fred Williams Ray Bradshaw 24 Ray Bradshaw 25 Amie Winetki 126 Anne Fraser 27 Anne Fraser 29 Anne Fraser 30 31 List of Suggested Modifications (not all revisions will be applicable to all scenarios in question 2) Fixed costs increased by $60,000 per month (5720,000 annual) Product "A" reduced by 1/3 units Product "C" increased by 200,000 250,000 units Double the sales prices of product "C" Special anniversary dividend of 50% extra Retained earnings 150,000 10% increase in per unit variable costs for union demands Chart I (incorporate changes in modification of Exhibit 3) Product B 32 Aggregate Product A 33 34 Unit Capacity 35 Unit Achievement Last Year 2,000,000 1,500,000 Next Year Last Year Next Year Last Year Next Year Last Year Product C Next Year 2,000,000 1,750,000 57 Unit Sales Price $ 7.20 6.95 $ 600,000 10.00 $ 400,000 10.00 $ 400,000 9.00 $ 400,000 500,000 550000 9.00 $ 2.40 4.80 Instructions ExhibitsCharts