Wilkerson Co.

Harvard Business School Case #101-092

Case Software #XLS007

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Exhibit 1

Wilkerson Company: Operating Results (March 2000)

Sales
Direct Labor Expense
Direct Materials Expense
Manufacturing overhead
Machine-related expenses
Setup labor
Receiving and production control
Engineering
Packaging and shipping
Total Manufacturing Overhead
Gross Margin
General, Selling & Admin. Expense
Operating Income (pre-tax)

$2,152,500
271,250
458,000

100%

$336,000
40,000
180,000
100,000
150,000
806,000
$617,250
559,650
$57,600

29%
3%

Exhibit 2

Product Profitability Analysis (March 2000)

Valves
$10.00
16.00
30.00
$56.00

Pumps
$12.50
20.00
37.50
$70.00

Flow Controllers
$10.00
22.00
30.00
$62.00

Target selling price

Planned gross margin (%)

$86.15
35%

$107.69
35%

$95.38
35%

Actual selling price

Actual gross margin (%)

$86.00
34.90%

$87.00
19.50%

$105.00
41.00%

Direct labor cost

Direct material cost
Manufacturing overhead
Standard unit costs

Exhibit 3

Product Data

Product Lines
Materials per unit

Materials cost per unit

Direct labor per unit
Direct labor $/unit @ $25/DL hour
(including employee benefits)
Machine hours per unit

Valves
4 components

Pumps
Flow Controllers
5 components 10 components

2 @ $2 = $ 4
2 @ 6 = 12

3 @ $2 = $ 6
2 @ 7 = 14

$16
.40 DL hours
$10

$20
.50 DL hours
$12.50

4 @ $1 = $ 4
5 @ 2 = 10
1@8= 8
$22
.40 DL hours
$10.00

0.5

0.5

0.3

Exhibit 4

Monthly Production and Operating Statistics (March 2000)

Valves
Production (units)
Machine hours
Production runs
Number of shipments
Hours of engineering work

7,500
3,750
10
10
250

Pumps
12,500
6,250
50
70
375

Flow
Controllers
4,000
1,200
100
220
625

Total
24,000
11,200
160
300
1,250