Camberland Metal industry - case summary

Report objective: Analyze the case of Camberland surface industries, and identify the adjacent 5 particular issues.

1.What is the guess cost of producing the curled metal detonates?

Usually costs take two forms, stubborn and variable. Of the two forms, unflinching costs do not vary with production or sales revenue. In this case, the hardened component of the estimate of throw a fit costs (exhibit 6) is unreasonable because of the assumption by which the fixed saddle must equal to 360% of direct jab to cover the knock of its large engineering staff. Besides, to the new product, little engineering had been through with(p) and excess capacity had been used for manufacturing. By activity base costing system, there is no reason to charge 360% of cut into as fixed costs.

The fixed rate per unit whitethorn vary with the production volume. If assuming a 5 long time linear depreciation period for the additional equipment, the additional fixed cost incurred is: 75000/(5* 12* 250) = $5 per pad. It is less than the difference of labor costs between the two options at any size. So, CMI would be better to add new equipment for the new product. Given the early(a) fixed costs by the ratio (0.45 on average) of fixed to variable in CMIs previous income statements, we can estimate the approximate cost for the popular size of 11 1/2 as follows:

(Material 15.64 + labor 11.64)*(1+0.45) + 5.00 = $ 44.6 per pad

2.Based on the Colerick and Fazio studies, what is the estimated saving per metal pad?

Cumberland Metal Industries:

Value Creation Analysis

Colerick TestFazio Test

AsbestosCMISavingsAsbestosCMISavings

Material costs;

Cost per set $50$40

Number of sets necessitate 201501

Total material$1,000$0$1,000$2,000$0$2,000

Pile Driving Costs

Equipment Rental

Average cost per hour86868686

Leads8888

Labor44444444

Total Costs138138138138

Estimated time costs

Total feet driven15000150001200012000

ft/hr rate150200160200

Time required (hrs)100757560

Total...

If you want to get a well(p) essay, order it on our website: Ordercustompaper.com



If you want to get a full essay, wisit our page: write my paper