Grover Screw Machine Products Company

The Grover Screw Machine Products Company recently received a bid of 10,000 spacers from a customer. Based on the capability of GSMPC, they are able to produce 6 alternative methods. The manager of GSMPC has to decide which method has great advantage to help company to win the bid. Calculating the contribution margin of each methods and get the breakeven, those numbers would help them to recognize the revenue and cost they get from different methods. The following table showed the cost of 3 methods

Exhibit 1: Cost of steel methods
Steel Rod, No Hole Steel Rod, Hole Steel tubing
Machining charge 34.29 17.78 22.86
Material cost 2.46 2.46 7.2
Setup cost 0.8 1 0.8
Price (1000 spacers) 37.75 21.24 30.86

Operation time (10000) 54 hours 28 hours 36 hours

At first, we have to calculate the cost of the rest 3 methods by producing with brass. The following table is calculation of ¡§Brass Rod,...