What is the profit margin per paper towel roll?

Module 05 Content

Suppose you are an operations manager at a large production facility that produces paper products. You are reviewing data findings showing that the cost of producing your brand of paper towels has risen almost twenty percent over the past six months. These costs include raw materials, equipment, labor costs, and building and administration costs. The labor contract with workers was just renewed. The pressing machines had to be upgraded. Raw materials costs are fluctuating. The following costs for making the paper towels were identified:

Today’s Production Costs: The costs from six months ago are included in an Excel Template.

Excel-Template-Assessment-5.xlsx

In row three (Todays Production Costs), fill out the following Excel columns with the following information.

Softwood Costs – ten cents per paper towel roll.
Chemical Glue and Resin Costs – two cents per paper towel roll.
Equipment Costs – pressing machines – five cents per paper towel roll.
Labor Costs – twenty cents per paper towel roll.
Building and Administration Costs – twenty-five cents per paper towel roll.
Total Paper Towel Production Costs – sixty-two cents per paper towel roll. We sell the paper towels at $1.00 per roll.

You have been asked by your Chief Operating Office via email to address the following questions in an email response:

What is the profit margin per paper towel roll?
What are the production costs per paper towel produced?
What is the significance the cost increases from the past 6 months?
Why is it necessary to do a trend analysis for this situation?
What are some recommendations to counteract the new setup costs?

Live Lecture Recording (Please make sure to watch to ensure all details and instructions are met): https://rasmussen.webex.com/recordingservice/sites/rasmussen/recording/31e5f91bac761039bf7f00505681a06f/playback

Rubric Details
Current Data
16% of total grade
Mastery: Advanced or exceeds achievement
Comprehensive attempt to fill in spreadsheet with current data.
9.6
Proficiency: Clear/effective achievement
Reasonable attempt to fill in spreadsheet with current data.
8.16
Competence: Adequate/basic achievement
Moderate attempt to fill in spreadsheet with current data.
7.2
Emerging: Limited or growing achievement
Rudimentary attempt to fill in spreadsheet with current data.
5.28
Profit Margin
16% of total grade
Mastery: Advanced or exceeds achievement
Correct profit margin per paper towel.
9.6
Proficiency: Clear/effective achievement
N/A
8.16
Competence: Adequate/basic achievement
N/A
7.2
Emerging: Limited or growing achievement
Incorrect profit margin per paper towel.
5.28
Production Costs
16% of total grade
Mastery: Advanced or exceeds achievement
Correct production costs per paper towel.
9.6
Proficiency: Clear/effective achievement
N/A
8.16
Competence: Adequate/basic achievement
N/A
7.2
Emerging: Limited or growing achievement
Incorrect production costs per paper towel.
5.28
Significance of Cost Increases
16% of total grade
Mastery: Advanced or exceeds achievement
Comprehensive discussion of significance of cost increases from the past 6 months.
9.6
Proficiency: Clear/effective achievement
Reasonable discussion of significance of cost increases from the past 6 months.
8.16
Competence: Adequate/basic achievement
Moderate discussion of significance of cost increases from the past 6 months.
7.2
Emerging: Limited or growing achievement
Rudimentary discussion of significance of cost increases from the past 6 months.
5.28
Rationale for Trend Analysis
16% of total grade
Mastery: Advanced or exceeds achievement
Comprehensive explanation of why a trend analysis is necessary.
9.6
Proficiency: Clear/effective achievement
Reasonable explanation of why a trend analysis is necessary.
8.16
Competence: Adequate/basic achievement
Moderate explanation of why a trend analysis is necessary.
7.2
Emerging: Limited or growing achievement
Rudimentary explanation of why a trend analysis is necessary.
5.28
Recommendations
20% of total grade
Mastery: Advanced or exceeds achievement
Comprehensive recommendations to counteract the new setup costs.
12
Proficiency: Clear/effective achievement
Reasonable recommendations to counteract the new setup costs.
10.2
Competence: Adequate/basic achievement
Moderate recommendations to counteract the new setup costs.
9
Emerging: Limited or growing achievement
Rudimentary recommendations to counteract the new setup costs.
6.6

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