Foxconn Case Study

Iphone factory Case Study

1-Price per unit=41,241/200=206.2

VC per unit=40,411/200=202.055

CMU= 206.2-202.055=4.145

Break-even point=Fixed Costs/CMU=729/4.145=175.875 units

2-Total Expected Costs= $41,140

Total Expected Cost per unit=41,140/200=$205.2

Actual Total Cost=$38,148

Actual cost per unit=$211.93

3-

Per unit ($) | Standard | Actual |

Sales price(Total rev/# of units) | 206.2 | 208.2 |

VC Flash Memory (cost/# of units) | 27 | 29.16 |

Application Process | 10.73 | 10.75 |

Chips-phone | 14.05 | 14.05 |

Gyroscope | 2.6 | 2.6 |

8 other chips | 70.95 | 70.24 |

Variable Supplies & tools | 62.54 | 62.81 |

Variable Labor Costs | 13.11 | 17.18 |

Shipping | 1.06 | 1.06 |

Flexible Budget

$ | Monthly Budget | Actual Budget | Budget Variance | Evaluation |

Number of units | 180,000 | 180,000 | - | |

Sales Revenue (1) | 206.2*180=37,116 | 37476 | 37476-37116=360 | F |

Variable Costs | | | | |

Flash Memory | 27*180=4860 | 5249 | 389 | U |

Application process | 1935 | 1935 | 0 | - |

Chips-phone | 2529 | 2529 | 0 | - |

Gyroscope | 468 | 468 | 0 | - |

8 other chips | 12771 | 12643 | (128) | F |

Variable supplies and tools | 11256.3 | 11305 | 48.7 | U |

Subtotal | 33819.3 | 34129 | 309.7 | U |

Labor | 2359.8 | 3092 | 732.2 | U |

Shipping | 190.8 | 191 | 0.2 | U |

Total Variable Costs | 36369.9 | 37412 | 1042.1 | U |

Fixed Costs | | | | |

Factory Rent | 400 | 400 | 0 | - |

Machine Depreciation | 150 | 150 | 0 | - |

Utility Fee and Taxes | 52 | 52 | 0 | - |

Supervision | 127 | 134 | 7 | U |

Total Fixed Costs | 729 | 736 | 7 | U |

Total Costs (2) | 37098.9 | 38148 | 1049.1 | U |

Net Income (1)-(2) | 17.1 | (672) | (689.1) | U |

4-

| Material | Labor |

Actual price (1) | 29.16 | 15.36 |

Standard price (2) | 27 | 11.8 |

Actual Quantity (3) | 180,000 | 180,000 |

Standard Quantity (4) | 200,000 | 200,000 |

Price Variance (1-2)*3 | 388,800 (U) | 640,800 (U) |

Usage Variance...