Harvard business case Camelback Communications

1. What will CCI now have to charge for each product to make a 40% mark-on?

If CCI maintains its rule about dropping products with a mark-on below 25%, which additional products, if any, will it drop? 2. If you decide to drop additional product(s), recalculate the allocation rate per hour for the new product mix. Repeat Question 1. 3. What is going on? 4. What would happen if the firm kept its existing cost system but differentiated between variable and fixed cost and decided to maximize contribution? 5. What would happen if the firm modified its cost system so that all variable costs were traced to the product accurately but fixed costs were allocated using the existing system? 6. What would happen if the firm modified its cost system so that it contained two cost pools, one containing the overhead costs associated with Products A and B and the other the overhead costs associated with Products C and D, and then allocated these overhead pools on the basis of direct labor hours?