BUSN6070_Giulia's Cost Analyses.xlsx - Growth...

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Growth Opportunity/Break-even Analysis (Giulia's)Option #1: Outsourcing Option #2: Running The Forge/In-house ProductionUnits (Pitons)1,000Sales price/Unit$11 Units (Pitons)/month4,000Unit Contribution Margin:Unit Contribution Margin Per Order:Packaging cost9,000Units (Pitons)/year48,000Sales $ 10.50Sales $ 504,000Packaging cost/ Unit9Sales price/Unit10.5Less: variable expensesLess: variable expensesMaterial (Titanium Alloy)/unit1.45Length of contract (months)24DM$ 1.45DM$ 69,600Increase in demand10%Utilities0.18Utilities$ 8,640Supply0.11Supply5,280.00Break even analysis:Total variable expense $ 1.74Total variable expense $ 83,520Per/UnitContribution margin$ 8.76Contribution margin$ 420,480Sales price/Unit$11 Variable cost:Less Variable cost:DM:Fixed costs:DM1.45Material (Titanium Alloy)/unit1.45Contribution margin (Ratio)83.43%Salary expense$ 345,000Packaging 9Material (Titanium Alloy)/year$ 69,600Occupancy expense33,000Contribution margin

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