I would really appreciate if you could answer this with solution steps.
Thank you in advance
Background: PACCAR Inc (PACCAR) is engaged in the design, manufacture and customer support of light, medium- and heavy-duty trucks under the Kenworth, Peterbilt and DAF nameplates. The company also provides customized financial services, information technology and truck parts related to its principal business. The Company operates in three segments: design, manufacture and distribution of light-, medium- and heavy- duty trucks, distribution of parts for the truck aftermarket and related commercial vehicles, and finance and leasing products and services provided to customers and dealers. The Company's finance and leasing activities are principally related to Company products and associated equipment. Problem: $ in millions Revenue COGS R&D $ $ $ $ $ $ 2012 15,952 (13,908) (279) (476) 0 $ $ $ $ $ $ 2011 15,326 (13,342) (288) (453) (11) 1,232 $ $ $ $ $ $ 2010 9,325 8,199 (239) (393) (9) 486 SG&A Other Trucks EBIT 1,288 140,400 138,000 78,800 Trucks Depreciation Expense $189.9 $196.5 Calculate for FY 2012 only: 1. Estimate the average Selling price and average COGS per unit (Please refer to 10-K for add'l details on COGS and depreciation expense] LINK to 10K: http://www.sec.gov/Archives/edgar/data/75362/000119312513080215/0001193125-13- 080215-index.htm 2. Estimate the contribution margin per truck. Please refer to the full set of financials below to identify all "non-cash and non-recurring charges. Additionally, please be sure to consider both manufacturing and non-manufacturing costs. For example, sales commissions are variable costs relative to revenue, so should you bake in part of the selling expense? 3. What is the "break-even" quantity per truck? 4. What is the Degree of Operating Leverage? Comment on the DOL and how it improved profitability over 2010-2012? Background: PACCAR Inc (PACCAR) is engaged in the design, manufacture and customer support of light, medium- and heavy-duty trucks under the Kenworth, Peterbilt and DAF nameplates. The company also provides customized financial services, information technology and truck parts related to its principal business. The Company operates in three segments: design, manufacture and distribution of light-, medium- and heavy- duty trucks, distribution of parts for the truck aftermarket and related commercial vehicles, and finance and leasing products and services provided to customers and dealers. The Company's finance and leasing activities are principally related to Company products and associated equipment. Problem: $ in millions Revenue COGS R&D $ $ $ $ $ $ 2012 15,952 (13,908) (279) (476) 0 $ $ $ $ $ $ 2011 15,326 (13,342) (288) (453) (11) 1,232 $ $ $ $ $ $ 2010 9,325 8,199 (239) (393) (9) 486 SG&A Other Trucks EBIT 1,288 140,400 138,000 78,800 Trucks Depreciation Expense $189.9 $196.5 Calculate for FY 2012 only: 1. Estimate the average Selling price and average COGS per unit (Please refer to 10-K for add'l details on COGS and depreciation expense] LINK to 10K: http://www.sec.gov/Archives/edgar/data/75362/000119312513080215/0001193125-13- 080215-index.htm 2. Estimate the contribution margin per truck. Please refer to the full set of financials below to identify all "non-cash and non-recurring charges. Additionally, please be sure to consider both manufacturing and non-manufacturing costs. For example, sales commissions are variable costs relative to revenue, so should you bake in part of the selling expense? 3. What is the "break-even" quantity per truck? 4. What is the Degree of Operating Leverage? Comment on the DOL and how it improved profitability over 2010-2012
