Exhibit 3 Resource Design/Drafting Engineering Fabrication Powder coating Scheduling General factory Purchase of Additional Capacity Capacity of next step 2,000 2,000 2,500 10,000 30 2,000 Purchase price of additional capacity Cost Driver Cost of next step design hours $ eng. hrs. $ 50,000.00 110,000.00 parts $ 3,150.00 square feet $ 80,000.00 job setups $ machine hrs $ 70,000.00 36,000.00 4) Assume that Chandler considers the production of the pool shades and trellises to be a short-term decision. Because there is currently excess capacity in their processes, the company wants to evaluate the new products using a cash outlay approach. Compute the impact on Chandlers profits for each option. Use the table below (Row 200 to Row 213, Column B to Column E) to: 4a) Compute the net change in cash of making and selling the full demand of pool shades. 4b) Compute the net change in cash of making and selling the full demand of trellises. 4c) Compute the net change in cash of making and selling the full demand of both pool shades and trellises. Resource Spending Approach Product Line Unit sales price Incremental revenue (Unit sales price*Units) Material Design/Drafting Engineering Fabrication Powder coating Scheduling General factory Total cost (Incremental revenue - Total cost) a. Full demand Pool Shades Only 42,500.00 2,250,000.00 b. Full demand Trellises Only 4,300.00 42,000.00 25/des. hr 55 /eng.hr 1.26/part 8/sq.ft. 2333.333333 /set up 18/mach hr c. Full demand Both Products Hint (numbers in Column F through Column M below will be automatically updated after you complete Part 2b) above): a. Pool Shades Only b. Trellises Only c. Both Size (Capacity) of Next Step Number of Number of Batches c. Both Excess (unused) capacity Batches Needed Needed Number of Batches Needed 500 250 30 0 20 0 50 2,000 4 0 2 0 6 2,000 1,000 4800 2 1,320 1 6,120 2,500 3 190,000 192000 1 10,200 0 202,200 10,000 2 110 120 1 60 0 180 30 3 16,000 9600 0 600 0 10,200 2,000