chartier's

Project Description:

chartiers fabricating and powder coating (“cfpc”) is attempting to land a new customer universal electric, inc. (“ui”). ui has asked cfpc to price the fabrication and painting of an electrical enclosure box for one of their lines to be sold to wal-mart. since wal-mart is a price conscious customer ui has indicated that it does not have a lot of flexibility in pricing. currently ui is buying this enclosure from an off-shore supplier in china at $8.75 per box. ui would like to understand if cfpc can be a domestic producer since their lead times are much shorter than that of ordering from china. ui has indicated that they will pay a 20% premium to be able to source out of the us and reduce their lead-times.
the controller has come to you with this opportunity and asked you to determine the price, the contribution margin of the product in dollars and the break-even in units if the following conditions are present. the controller has also asked you calculate the using a contribution margin % of 10%, 15%, 20% & 30%.
in addition the controller would like you evaluate each case and determine at which contribution rate the company should accept the order. he would like you to defend you selection both in words and with a graph.
certain costs will be incurred by cfpc to re-tool the mill to produce the products as requested by cfpc.
time to make each unit is 8 minutes
fully loaded labor cost is $15.60/hour
material cost/unit is $3.65/unit
powder coating cost/unit is $1.50/unit
case a case b case c
fixed overhead $10,000 $5,000 $0
new product investment $5,000 $5,000 $3,500
Skills Required:
Project Stats:

Price Type: Negotiable

Expired
Total Proposals: 2
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