Mendel Paper Company

In this case, you are provided information regarding selling prices and costs of several products offered by Mendel Paper Company. In addition, management has concerns about sales mix and rising costs. Address the questions (1-5) at the end of the case. Based on the case questions, you are required to provide a three to five double-spaced written report (excluding the title and reference pages), addressing management’s concerns. The written report should be properly formatted according to APA guidelines and demonstrate research and critical thinking skills. Conclusions and recommendations should be supported by at least three scholarly sources.

For Questions 1 through 4, you will need to complete several calculations – be sure to label and clearly identify your work to demonstrate your understanding of the concept even if you are not sure if you have arrived at the correct answer. The calculations should be included as part of your analysis and written report required for submission.

For Question 5, fully address management’s concerns as part of your written analysis using the original or revised estimates to support your recommendation/explanation. As part of your written analysis, include how management might use these calculations to make decisions.

Questions:
1. From all original estimates given, prepare estimated contribution margins by product line
for the next fiscal quarter. Also, show the contribution margins per unit.
2. Prepare contribution margins as in part (1) with all revisions included.
3. For the original estimates, compute each of the following:
a. Break-even point for the given sales mix.
b. Margin of safety for the estimated sales volume.
4. For the revised estimates, compute each of the following:
a. Break-even point for the given sales mix.
b. Margin of safety for the estimated sales volume.
5. Comment on Herbert’s concern about the variable cost of the place mats.

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