Instruction: This assignment should be submitted in excel format. The due date and time is 05 March, 2022 @ 23:59 hours

DANGOTE INDUSTRIES ZAMBIA LIMITED is located in Ndola, Zambia and is part of the Cement and Concrete Product Manufacturing Industry. Pursuing a cost-leadership strategy, the company has tried to improve quality and reduce costs. As a result of the actions taken over the last year, quality has significantly improved in 2021 while rework and unit costs of the Cement have decreased. Dangote has reduced manufacturing capacity because capacity is no longer needed to support rework. Dangote has also lowered selling price to gain market share and unit sales have increased. Information about the current period (2021) and last period (2020) follows:

	2020	2021
1. Units of Cement produced and sold	18,000	30,000
2. Selling price	K150	K120
3. Direct materials used (units)	21,600	32,400
4. Direct material cost per unit	K36	K36
5. Manufacturing capacity in units processed	36,000	33,600
6. Total packaging costs	792,000	739,200
7. Packaging cost per unit of capacity (row 6, row5)	K26.4	K26.4
8. Selling and customer-service capacity	240 customers	240 customers
9. Total selling and customer-service costs	K42,000	K45,600
10 Selling and customer-service capacity cost per customer ((row 9 , row 8)	K210	K228

Packaging costs in each year depend on production capacity defined in terms of units that can be processed ,

not the actual units started. Selling and customer-service costs depend on the number of customers that

Dangote can support, not the actual number of customers it serves. Dangote has 150 customers in 2020 and

180 customers in 2021.

1.Calculate operating income of Dangote for 2020 and 2021.

2.Calculate the growth, price-recovery, and productivity components that explain the change in operating income from 2020 to 2021.

3.Comment on your answer in requirement 2. What do these components indicate? How does this relate to Dangote s strategy and its success in implementation? Explain.

4. Suppose that during 2021, the market for Cement increased by 25%. All increases in market share (that is, sales increases greater than 25%) and decreases in the selling price of Cement are the result of Dangote s strategic actions. Calculate how much of the change in operating income from 2020 to 2021 is due to the industry-market-size factor, product differentiation, and cost leadership. How does this relate to Dangote s strategy and its success in implementation? Explain.

5.Calculate the amount and cost of (a) unused manufacturing capacity and (b) unused selling and customer-service capacity at the beginning of 2021 based on actual production and actual number of customers served in 2021.

6.Suppose Dangote can add or reduce its selling and customer-service capacity in increments of 10 customers. What is the maximum amount of costs that Dangote could save in 2021 by downsizing selling and customer-service capacity?

7.Dangote, does not eliminate any of its unused selling and customer-service capacity. Why might Dangote not downsize?