Beauregard Textile Co.

Harvard Business School Case #191-058

Case Software #XLS-114

Copyright © 2011 President and Fellows of Harvard College. No part of this product may be
reproduced, stored in a retrieval system or transmitted in any form or by any means—electronic,
mechanical, photocopying, recording or otherwise—without the permission of Harvard Business
School.
Exhibit 1 Quarterly Prices and Sales Volumes for T-30 Fabric, 1988-1990

Beauregard Calhoun & Pritchard

Actual Sales Estimated Sales
Year and Quarter Price Volume (Yards) Price Volume (Yards)
1988 1st $3 124,870 $3 100,000
2nd 3 126,016 3 100,000
3rd 3 125,426 3 100,000
4th 3 198,863 4 25,000
1989 1st 3 127,201 3 100,000
2nd 3 125,277 3 100,000
3rd 3 126,124 3 100,000
4th 3 125,302 3 100,000
1990 1st 4 74,860 3 150,000
2nd 4 77,216 3 150,000
3rd 4 75,000 (est.) 3 150,000
4th

Source: Marketing Department, Beauregard Textile Company

Exhibit 2 Beauregard's Estimated Cost per Yard of Triaxx-30 at Various Volumes of Production

Production Volume in Yards of Material

25,000 50,000 75,000 100,000 125,000 150,000 175,000 200,000
Direct Labor $0.860 $0.830 $0.800 $0.780 $0.760 $0.740 $0.760 $0.800
Material 0.400 0.400 0.400 0.400 0.400 0.400 0.400 0.400
Material Spoilage 0.042 0.040 0.040 0.040 0.038 0.038 0.038 0.040
Department Expense:
Direct* 0.198 0.140 0.120 0.112 0.100 0.100 0.100 0.100
Indirect** 2.400 1.200 0.800 0.600 0.480 0.400 0.343 0.300
General Overhead*** 0.258 0.249 0.24 0.234 0.228 0.222 0.228 0.240
Factory Cost $4.158 $2.859 $2.400 $2.166 $2.006 $1.900 $1.869 $1.880
Selling and Admin.
Expense**** 2.703 1.858 1.560 1.408 1.304 1.236 1.215 1.222
Total Cost $6.861 $4.717 $3.960 $3.574 $3.310 $3.136 $3.084 $3.102

* Indirect labor, supplies, repairs, power, etc.

** Depreciation, supervision, etc.
*** 30 percent of direct labor
**** 65 percent of factory cost