Premium Essay

Dunish

In: Business and Management

Submitted By mshenouda
Words 554
Pages 3
1. As we can see from the Exhibit 1, 176,087 Apple iPhone 4’s would have to have been completed for Danshui Plant No.2 to break even. 2. 2. The total expected cost per unit was $205.7 per unit and the actual cost per unit was $211.93 per unit. See Exhibit 2. 3. 3 & 4. The data is showing in the Exhibit 3 & 4. 4. 5. From the data of question 3, the variance of revenue is favorable because Apple increased price of flash memory by $2. However the company didn’t gain profits from the revenue due to the increased price of flash memory provided by Samsung. The variance of flash memory is unfavorable because of two reasons: first reason is the price of each unit raised $2; the second reason is the company damaged 1,000 units of flash memory. So company used more flash memories than expected. The variance of 8 other chips is favorable, we cannot say the amount of chips decreased, so it should be the price of chips went down. The variance of supplies and tools is unfavorable. We think there are two reasons: company used the supplies and tools less efficient which means used more of supplies and tools, or company spend more money on purchase supplies and tools. The variance of labor is unfavorable, due to the wages of labor increased and working hours also increased, it was inefficient. The supervision is unfavorable because of the salary of supervisor increased. In conclusion, the actual net income is negative because company spends more money or use more on flash memories, supplies and tools and assembly and packing. In addition, company didn’t gain more revenue so that the revenue can’t cover the total cost. The company did a good job on other costs that were not change, such as Application Process and Gyroscope.
The material price variance is unfavorable, because the actual price is increased by $2 comparing with the standard price. The material usage

Similar Documents