SwimSkin Inc.
Parameters
Base Case (b) (c ) (ii)
Unit Price $ 129.95 $ 129.95 $ 129.95
Units sold 3000 3000 3000
Variable Manufacturing cost per uni $ 75.75 $ 95.00 $ 70.00
Distribution cost per unit $ 5.00 $ 5.00 $ 5.00
Fixed Manufacturing Costs $ 52,000.00 $ 52,000.00 $ 52,000.00
Marketing Costs $ 75,000.00 $ 60,000.00 $ 75,000.00
Sales and Admin costs $ 18,000.00 $ 18,000.00 $ 18,000.00
Calculations
Variable Manufacturing Costs $ 227,250.00 $ 285,000.00 $ 210,000.00
Distribution Costs $ 15,000.00 $ 15,000.00 $ 15,000.00
Fixed Costs $ 145,000.00 $ 130,000.00 $ 145,000.00
Total Costs $ 387,250.00 $ 430,000.00 $ 370,000.00
Summary
Total Revenue $ 389,850.00 $ 389,850.00 $ 389,850.00
Contribution Margin $ 147,600.00 $ 89,850.00 $ 164,850.00
Net Profit $ 2,600.00 $ (40,150.00) $ 19,850.00
(a)Effect of Units Sold on the model
Units Total Revenue Contribution MarginNet Profit
3000 $ 389,850.00 $ 147,600.00 $ 2,600.00 Base case
500 $ 64,975.00 $ 24,600.00 $ (120,400.00)
1000 $ 129,950.00 $ 49,200.00 $ (95,800.00)
1500 $ 194,925.00 $ 73,800.00 $ (71,200.00)
2000 $ 259,900.00 $ 98,400.00 $ (46,600.00)
2500 $ 324,875.00 $ 123,000.00 $ (22,000.00)
3000 $ 389,850.00 $ 147,600.00 $ 2,600.00
3500 $ 454,825.00 $ 172,200.00 $ 27,200.00
4000 $ 519,800.00 $ 196,800.00 $ 51,800.00
4500 $ 584,775.00 $ 221,400.00 $ 76,400.00
5000 $ 649,750.00 $ 246,000.00 $ 101,000.00
(b)
Units Total Revenue Contribution MarginNet Profit
3000 $ 389,850.00 $ 89,850.00 $ (40,150.00) Base case
500 $ 64,975.00 $ 14,975.00 $ (115,025.00)
1000 $ 129,950.00 $ 29,950.00 $ (100,050.00)
1500 $ 194,925.00 $ 44,925.00 $ (85,075.00)
2000 $ 259,900.00 $ 59,900.00 $ (70,100.00)
2500 $ 324,875.00 $ 74,875.00 $ (55,125.00)
3000 $ 389,850.00 $ 89,850.00 $ (40,150.00)
3500 $ 454,825.00 $ 104,825.00 $ (25,175.00)
4000 $ 519,800.00 $ 119,800.00 $ (10,200.00)
4500 $ 584,775.00 $ 134,775.00 $ 4,775.00
5000 $ 649,750.00 $ 149,750.00 $ 19,750.00
(C) (i)
Unit Price
$ 2,600.00 $ 119.95 $ 129.95 $ 139.95
Units 500 $ (125,400.00) $ (120,400.00) $ (115,400.00)
1000 $ (105,800.00) $ (95,800.00) $ (85,800.00)
1500 $ (86,200.00) $ (71,200.00) $ (56,200.00)
2000 $ (66,600.00) $ (46,600.00) $ (26,600.00)
2500 $ (47,000.00) $ (22,000.00) $ 3,000.00
3000 $ (27,400.00) $ 2,600.00 $ 32,600.00
3500 $ (7,800.00) $ 27,200.00 $ 62,200.00
4000 $ 11,800.00 $ 51,800.00 $ 91,800.00
4500 $ 31,400.00 $ 76,400.00 $ 121,400.00
5000 $ 51,000.00 $ 101,000.00 $ 151,000.00
(C ) (ii)
Unit Price
Units $ 19,850.00 $ 119.95 $ 129.95 $ 139.95
500 $ (122,525.00) $ (117,525.00) $ (112,525.00)
1000 $ (100,050.00) $ (90,050.00) $ (80,050.00)
1500 $ (77,575.00) $ (62,575.00) $ (47,575.00)
2000 $ (55,100.00) $ (35,100.00) $ (15,100.00)
2500 $ (32,625.00) $ (7,625.00) $ 17,375.00
3000 $ (10,150.00) $ 19,850.00 $ 49,850.00
3500 $ 12,325.00 $ 47,325.00 $ 82,325.00
4000 $ 34,800.00 $ 74,800.00 $ 114,800.00
4500 $ 57,275.00 $ 102,275.00 $ 147,275.00
5000 $ 79,750.00 $ 129,750.00 $ 179,750.00
(D)
Marketing Costs Profits
$ 75,000.00 $ 2,600.00 Base case
$ 25,000.00 Err:504
$ 50,000.00 Err:504
$ 75,000.00 Err:504
$ 100,000.00 Err:504
$ 125,000.00 Err:504
(E )
Variation in profits
Unit price
$ 2,600.00 $ 99.95 $ 104.95 $ 109.95
Marketing Costs $ 25,000.00 Err:504 Err:504 Err:504
$ 50,000.00 Err:504 Err:504 Err:504
$ 75,000.00 Err:504 Err:504 Err:504
$ 100,000.00 Err:504 Err:504 Err:504
$ 125,000.00 Err:504 Err:504 Err:504
Influence Diagram
Black Box Diagram
Decison variable
Unit Selling Price
Parameters
Variable Manufacturing cost per
unit Distribution cost per unit
Fixed Manufacturing Costs
Marketing Costs
Sales and Admin costs
Units sold
$ 149.95 $ 159.95
$ (110,400.00) $ (105,400.00)
$ (75,800.00) $ (65,800.00)
$ (41,200.00) $ (26,200.00)
$ (6,600.00) $ 13,400.00
$ 28,000.00 $ 53,000.00
$ 62,600.00 $ 92,600.00
$ 97,200.00 $ 132,200.00
$ 131,800.00 $ 171,800.00
$ 166,400.00 $ 211,400.00
$ 201,000.00 $ 251,000.00
$ 149.95 $ 159.95
$ (107,525.00) $ (102,525.00)
$ (70,050.00) $ (60,050.00)
$ (32,575.00) $ (17,575.00)
$ 4,900.00 $ 24,900.00
$ 42,375.00 $ 67,375.00
$ 79,850.00 $ 109,850.00
$ 117,325.00 $ 152,325.00
$ 154,800.00 $ 194,800.00
$ 192,275.00 $ 237,275.00
$ 229,750.00 $ 279,750.00
$ 114.95 $ 119.95 $ 124.95 $ 129.95 $ 134.95 $ 139.95 $ 144.95
Err:504 Err:504 Err:504 Err:504 Err:504 Err:504 Err:504
Err:504 Err:504 Err:504 Err:504 Err:504 Err:504 Err:504
Err:504 Err:504 Err:504 Err:504 Err:504 Err:504 Err:504
Err:504 Err:504 Err:504 Err:504 Err:504 Err:504 Err:504
Err:504 Err:504 Err:504 Err:504 Err:504 Err:504 Err:504
Outcomes
Profit
Consequences
Variable Manufacturing Costs
Distribution Costs
Fixed Costs
Total Costs
Total Revenue
$ 149.95
Err:504
Err:504
Err:504
Err:504
Err:504
Scenario Summary
Current Values: Worst Case Base Cae Best Case
Changing Cells:
Unit_Price $ 129.95 $ 99.95 $ 129.95 $ 149.95
Units_Sold 3000 2500 3000 4000
Result Cells:
Profit $ 2,600.00 $ (97,000.00) $ 2,600.00 $ 131,800.00
Notes: Current Values column represents values of changing cells at
time Scenario Summary Report was created. Changing cells for each
scenario are highlighted in grey.
Honeydukes Co. Influence Diagram
Parameters
Unit Cost of Grapes (Contract) $ 0.25
Unit Cost of Grapes (Open Market) $ 0.30
Unit Cost of Sugar for coating $ 0.55
Amount of Sugar coating required per pound of rais 0.05
Amount of Grapes reqd per pound of raisins 2.50
Unit cost of Inhouse Processing $ 0.20
Unit Cost of Outsourced Processing $ 0.45
Limit Of Inhouse Processing 1500000
Fixed Processing cost 200000
Starting Unit Price $ 2.20
Demand at starting price 750000
Increase/Decrease in demand per penny of unit pri 15000
Black Box Diagram
Decision
Decision Variable
Unit Price $ 2.20 Unit Price
Amount of Contract gr
Amount of Contract grapes 1000000
Calculations
Parameters
Unit Cost of Grapes (Co
Demand of Sugar Coated Raisins 750000 Unit Cost of Grapes (Op
Quantity of Grapes 1875000 Unit Cost of Sugar for c
Amount of Sugar coatin
Amount of Contract Grapes 1000000 Amount of Grapes reqd
Amount of Open Market Grapes 875000 Unit cost of Inhouse Pr
Amount of Sugar Coating 37500 Unit Cost of Outsource
Limit Of Inhouse Proce
Grapes Processed Inhouse 1500000 Fixed Processing cost
Grapes Processed by Outsourcing 375000 Starting Unit Price
Demand at starting pri
Income and CF statement Increase/Decrease in d
price
Total Revenue $ 1,650,000.00
Cost of Grapes(open market + contract) $ 512,500.00
Cost of Sugar $ 20,625.00
Processing cost $ 668,750.00
Total Cost $ 1,201,875.00
Summary
Net Profit(Before Taxes) $ 448,125.00
nfluence Diagram
lack Box Diagram
Decision Variable
Unit Price
Amount of Contract grapes
Parameters
Unit Cost of Grapes (Contract)
Unit Cost of Grapes (Open Market)
Unit Cost of Sugar for coating
Amount of Sugar coating required
Amount of Grapes reqd raisins
Unit cost of Inhouse Processing
Unit Cost of Outsourced Processing
Limit Of Inhouse Processing
Fixed Processing cost
Starting Unit Price
Demand at starting price
Increase/Decrease in demand per penny of unit
price
Profit
Total Revenue
Total Cost
Cost of Grapes(open market + contract)
Cost of Sugar
Processing cost
Demand of Sugar Coated Raisins
Quantity of Grapes
Amount of Contract Grapes
Amount of Open Market Grapes
Amount of Sugar Coating
Grapes Processed Inhouse
Grapes Processed by Outsourcing
e
es(open market + contract)
r
ost
ugar Coated Raisins
Grapes
ontract Grapes
pen Market Grapes
ugar Coating
essed Inhouse
essed by Outsourcing
Honeydukes Co.
(A)
Parameters
Unit Cost of Grapes (Contract) $ 0.25
Unit Cost of Grapes (Open Market) $ 0.81 Break-Even Point of Open M
Unit Cost of Sugar for coating $ 0.55
Amount of Sugar coating required per pound of raisi 0.05
Amount of Grapes reqd per pound of raisins 2.50
Unit cost of Inhouse Processing $ 0.20
Unit Cost of Outsourced Processing $ 0.45
Limit Of Inhouse Processing 1500000
Fixed Processing cost 200000
Starting Unit Price $ 2.20
Demand at starting price 750000
Increase/Decrease in demand per penny of unit pric 15000
Decision
Unit Price $ 2.20
Amount of Contract grapes 1000000
Calculations
Demand of Sugar Coated Raisins 750000
Quantity of Grapes 1875000
Amount of Contract Grapes 1000000
Amount of Open Market Grapes 875000
Amount of Sugar Coating 37500
Grapes Processed Inhouse 1500000
Grapes Processed by Outsourcing 375000
Income and CF statement
Total Revenue $ 1,650,000.00
Cost of Grapes(open market + contract) $ 960,625.00
Cost of Sugar $ 20,625.00
Processing cost $ 668,750.00
Total Cost $ 1,650,000.00
Summary
Net Profit(Before Taxes) $ -
reak-Even Point of Open Market Price is $0.81
Honeydukes Co.
Parameters
Unit Cost of Grapes (Contract) $ 0.25
Unit Cost of Grapes (Open Market) $ 0.30
Unit Cost of Sugar for coating $ 0.55
Amount of Sugar coating required per pound of rais 0.05
Amount of Grapes reqd per pound of raisins 2.50
Unit cost of Inhouse Processing $ 0.20
Unit Cost of Outsourced Processing $ 0.45
Limit Of Inhouse Processing 1500000
Fixed Processing cost 200000
Starting Unit Price $ 2.20
Demand at starting price 750000
Increase/Decrease in demand per penny of unit pric 15000
Decision
Unit Price $ 2.20
Amount of Contract grapes 1000000
Calculations
Demand of Sugar Coated Raisins 750,000.00
Quantity of Grapes 1,875,000.00
Amount of Contract Grapes 1000000
Amount of Open Market Grapes 875,000.00
Amount of Sugar Coating 37,500.00
Grapes Processed Inhouse 1,500,000.00
Grapes Processed by Outsourcing 375,000.00
Income and CF statement
Total Revenue $ 1,650,000.00
Cost of Grapes(open market + contract) $ 512,500.00
Cost of Sugar $ 20,625.00
Processing cost $ 668,750.00
Total Cost $ 1,201,875.00
Summary
Net Profit(Before Taxes) $ 448,125.00
(B)
Net Profit
$ 448,125.00
Sales Price $ 1.80 $ 86,625.00
$ 1.90 $ 222,000.00
$ 2.00 $ 327,375.00
$ 2.10 $ 402,750.00
$ 2.20 $ 448,125.00
$ 2.30 $ 463,500.00
$ 2.40 $ 523,875.00
$ 2.50 $ 554,250.00
$ 2.60 $ 554,625.00
$ 2.70 $ 525,000.00
$ 2.80 $ 465,375.00
(C) Unit Selling Price vs Amount of Contract Grapes
$ 448,125.00 500000 600000 700000 800000
$ 1.80 $ 61,625.00 $ 66,625.00 $ 71,625.00 $ 76,625.00
$ 1.90 $ 197,000.00 $ 202,000.00 $ 207,000.00 $ 212,000.00
$ 2.00 $ 302,375.00 $ 307,375.00 $ 312,375.00 $ 317,375.00
$ 2.10 $ 377,750.00 $ 382,750.00 $ 387,750.00 $ 392,750.00
$ 2.20 $ 423,125.00 $ 428,125.00 $ 433,125.00 $ 438,125.00
$ 2.30 $ 438,500.00 $ 443,500.00 $ 448,500.00 $ 453,500.00
$ 2.40 $ 498,875.00 $ 503,875.00 $ 508,875.00 $ 513,875.00
$ 2.50 $ 529,250.00 $ 534,250.00 $ 539,250.00 $ 544,250.00
$ 2.60 $ 529,625.00 $ 534,625.00 $ 539,625.00 $ 544,625.00
$ 2.70 $ 500,000.00 $ 505,000.00 $ 510,000.00 $ 515,000.00
$ 2.80 $ 440,375.00 $ 445,375.00 $ 450,375.00 $ 455,375.00
900000 1000000 1100000 1200000 1300000 1400000
$ 81,625.00 $ 86,625.00 $ 91,625.00 $ 96,625.00 $ 101,625.00 $ 106,625.00
$ 217,000.00 $ 222,000.00 $ 227,000.00 $ 232,000.00 $ 237,000.00 $ 242,000.00
$ 322,375.00 $ 327,375.00 $ 332,375.00 $ 337,375.00 $ 342,375.00 $ 347,375.00
$ 397,750.00 $ 402,750.00 $ 407,750.00 $ 412,750.00 $ 417,750.00 $ 422,750.00
$ 443,125.00 $ 448,125.00 $ 453,125.00 $ 458,125.00 $ 463,125.00 $ 468,125.00
$ 458,500.00 $ 463,500.00 $ 468,500.00 $ 473,500.00 $ 478,500.00 $ 483,500.00
$ 518,875.00 $ 523,875.00 $ 528,875.00 $ 533,875.00 $ 538,875.00 $ 543,875.00
$ 549,250.00 $ 554,250.00 $ 559,250.00 $ 564,250.00 $ 569,250.00 $ 574,250.00
$ 549,625.00 $ 554,625.00 $ 559,625.00 $ 564,625.00 $ 569,625.00 $ 574,625.00
$ 520,000.00 $ 525,000.00 $ 530,000.00 $ 535,000.00 $ 540,000.00 $ 545,000.00
$ 460,375.00 $ 465,375.00 $ 470,375.00 $ 475,375.00 $ 480,375.00 $ 485,375.00
1500000
$ 111,625.00
$ 247,000.00
$ 352,375.00
$ 427,750.00
$ 473,125.00
$ 488,500.00
$ 548,875.00
$ 579,250.00
$ 579,625.00
$ 550,000.00
$ 490,375.00
Scenario Summary
Current Values: Low Medium High
Changing Cells:
$B$5 $ 0.30 $ 0.25 $ 0.30 $ 0.35
Result Cells:
Net_Profit $ 448,125.00 $ 491,875.00 $ 448,125.00 $ 404,375.00
Notes: Current Values column represents values of changing cells at
time Scenario Summary Report was created. Changing cells for each
scenario are highlighted in grey.
Acme
(A) Base case (B)
Parameters
Fixed Cost $ 15,000.00 Ticket Price
No. of speakers 10 $ 600.00
Cost per speaker $ 700.00 $ 700.00
Cost of food and lodging per Participa $ 300.00 $ 800.00
No. of participants (excluding speaker 42 $ 900.00
Total Participants 52 $ 1,000.00
$ 1,100.00
$ 1,200.00
Decision $ 1,300.00
$ 1,400.00
Ticket price $ 1,200.00 $ 1,500.00
Summary of Key Outcomes
Total Profit $ 12,800.00
Income and CF Statement
Cost for speakers $ 7,000.00
Food & lodging expenses $ 15,600.00
Total cost $ 37,600.00
Total Revenue $ 50,400.00
Influence Diagram
Profit
$ 12,800.00
-12400
-8200
-4000
200
4400
8600
12800
17000
21200
25400
Black-Box Diagram
Decison Variable
Ticket Price
Parameters
Fixed Cost
No. of speakers
Cost per speaker
Cost of food and lodging per Participant
No. of participants (excluding speaker)
Total Participants
Outcome:
Profit
Consequences
Cost for speakers
Food & lodging expenses
Total cost
Total Revenue
Acme
Parameters (C ) Break Even
Fixed Cost $ 15,000.00 Number of participants req
No. of speakers 10
Cost per speaker $ 700.00
Cost of food and lodging per Particip $ 300.00
No. of participants (excluding speake 27.777777777778
Total Participants 37.777777777778
Decision
Ticket price $ 1,200.00
Summary of Key Outcomes
Total Profit $ -
Income and CF Statement
Cost for speakers $ 7,000.00
Food & lodging expenses $ 11,333.33
Total cost $ 33,333.33
Total Revenue $ 33,333.33
C ) Break Even
umber of participants required to break even = 28
