Questions and Answers of Cases in Cost Management

(a) Estimate the ROI for AirWrap if it could operate at 90% of capacity in its own manufacturing facilities. Assume Selling and Marketing at 7% of Sales, R&D at zero, and Administrative cost at
(a) Estimate the full cost per 1000 sq. ft. to manufacture and ship AirWrap using its own equipment.(b) Comment
(a) Estimate the variable cost per 1,000 sq. ft., on average, to manufacture and ship AirWrap using the AirSeal Equipment. (Assume the average bubble thickness is 3/16 inch.)(b) Estimate the full
(a) What annual sales level for AirWrap can be supported using the excess capacity on the AirSeal equipment as of 1985? Assume average price of $29 to distributors.(b) So what?
(a) Calculate the LCC per carton for College-Craft Glassware for AirSeal, AirWrap, and Cardboard.(b) Based on part (a), what is the market potential for AirSeal and AirWrap for this customer?
(a) Calculate the LCC per shipment for FAP for Air Cap, AirWrap, and “Loose Peanuts,” using the data from the case.(b) Based on part (a), what is the market potential for AirSeal and for AirWrap
(a) Calculate the LCC for NEW per-shipment for AirSeal and AirWrap.(b) Based on part (a), what is the market potential for AirWrap for this customer?
(a) Calculate the LCC to Noritake per shipment for AirSeal and AirWrap.(b) Based on part (a), what is the market potential of AirWrap for this customer?
a) Calculate the break-even sales volume in dollars for AirSeal in 1985.b) Discuss the “Operating Leverage.”
How would the ROI change if excess capacity (Fixed Manufacturing Overhead, Factory Labor, and Manufacturing Equipment) were not charged to the product line?
(a) What is the Return on Investment (ROI) for AirSeal for 1985? (b) How is the AirSeal product line doing, using the “DuPont formula?”