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  • BTC Case Solution

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    Animesh Choubey
    2K views4 pages
    The document analyzes three scenarios for Beauregard Textile Company (BTC) and its competitor C&P based on different price and cost assumptions. Scenario A assumes current prices of $4 for BTC and $3 for C&P. Scenario B assumes competitive pricing of $3 for both companies. Scenario C assumes collusive pricing of $4 for both companies. For each scenario, the document calculates relevant costs, incremental contributions, total contributions, and industry contributions based on different production volumes for BTC and C&P.

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    btc

    Original Title

    BTC Case Solution (1)

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    The document analyzes three scenarios for Beauregard Textile Company (BTC) and its competitor C&P based on different price and cost assumptions. Scenario A assumes current prices of $4 for BTC and $3 for C&P. Scenario B assumes competitive pricing of $3 for both companies. Scenario C assumes collusive pricing of $4 for both companies. For each scenario, the document calculates relevant costs, incremental contributions, total contributions, and industry contributions based on different production volumes for BTC and C&P.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    2K views4 pages

    BTC Case Solution

    Uploaded by

    Animesh Choubey
    The document analyzes three scenarios for Beauregard Textile Company (BTC) and its competitor C&P based on different price and cost assumptions. Scenario A assumes current prices of $4 for BTC and $3 for C&P. Scenario B assumes competitive pricing of $3 for both companies. Scenario C assumes collusive pricing of $4 for both companies. For each scenario, the document calculates relevant costs, incremental contributions, total contributions, and industry contributions based on different production volumes for BTC and C&P.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 4

    Case Solution Beauregard Textile Company

    Relevant Costs for BTC


    Production Volume
    Direct Labour
    Material
    Spoilage
    Dept Direct Exp
    Total Relevant Cost (Per Unit)

    Possible Scenarios
    A. Current - BTC: $4; C&P: $3
    B. Competitive - BTC: $3; C&P: $3
    C. Collusive - BTC: $4; C&P: $4

    Scenario Analysis (A)


    Selling Price
    Relevant Cost (Per Unit)
    Incremental Contribution
    Total Contribution

    25000
    0.86
    0.4
    0.042
    0.198
    1.5

    50000
    0.83
    0.4
    0.04
    0.14
    1.41

    75000
    0.8
    0.4
    0.04
    0.12
    1.36

    100000
    0.78
    0.4
    0.04
    0.112
    1.332

    Sales
    BTC
    C&P
    75000
    150000
    125000
    100000
    100000
    80000 (20% Reduction in demand for both the

    BTC

    C&P

    4
    1.36
    2.64
    198000

    3
    1.278
    1.722
    258300

    Industry

    456300

    Scenario Analysis (B)


    Selling Price
    Relevant Cost (Per Unit)
    Incremental Contribution
    Total Contribution

    Scenario Analysis (C)


    Selling Price
    Relevant Cost (Per Unit)
    Incremental Contribution
    Total Contribution

    BTC

    C&P

    3
    1.298
    1.702
    212750

    3
    1.332
    1.668
    166800

    BTC

    C&P

    4
    1.332
    2.668
    266800

    4
    1.36
    2.64
    211200

    Industry

    379550

    Industry

    478000

    125000
    0.76
    0.4
    0.038
    0.1
    1.298

    150000
    0.74
    0.4
    0.038
    0.1
    1.278

    175000
    0.76
    0.4
    0.038
    0.1
    1.298

    tion in demand for both the entities)

    200000
    0.8
    0.4
    0.04
    0.1
    1.34

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