Overview
Using the data provided in Table 1 of the Jinchang Case - Student Template.xlsxl Download Jinchang Case - Student Template.xlsx[xlsx], complete the following calculations in Table 3:
For both Rubber Black and Pigment Black, and for each of the second and third quarters, compute:
- Average sales price per metric ton (T.)
- Variable cost per M.T.
- Unit commission
- Contribution margin per M.T.
- Contribution margin ratio
Follow the format and methodology demonstrated in the first-quarter example already provided in Table 3.
Once you have completed Table 3, answer the following questions 1 to 4.
Flag question: Question 1Question 11 pts
What is the unit contribution margin (or CM) for Rubber Black in the third quarter?
Enter the unit CM here. Please round the number to two decimal places. Enter a number without the dollar sign $.
Flag question: Question 2Question 21 pts
What is the contribution margin ratio for Rubber Black in the third quarter?
Enter the CM ratio here. Please round the number to two decimal places. Enter a number without the percentage sign %. For example, if your answer is 3.56%, please enter 3.56.
Flag question: Question 3Question 31 pts
What is the unit CM for Pigment Black in the third Quarter?
Enter the unit CM here. Please round the number to two decimal places. Enter a number without the dollar sign $.
Flag question: Question 4Question 41 pts
What is the contribution margin ratio for Pigment Black in the third quarter?
Enter the CM ratio here. Please round the number to two decimal places. Enter a number without the percentage sign %. For example, if your answer is 3.56%, please enter 3.56.
Flag question: Spacer
Now that you’ve completed Table 3 in the Jinchang Case - Student Template.xlsx Download Jinchang Case - Student Template.xlsx[xlsx], you are ready to conduct your multiproduct CVP analysis.
Please follow the instructions provided in the Jinchang Case - Student Template.xlsx Download Jinchang Case - Student Template.xlsx[xlsx] and those discussed during our Live Sessions.
Key considerations:
- The sales price and variable cost of Carbon Black have changed across the three quarters.
- Using data from different quarters will result in different breakeven unit calculations.
- This variability reflects the complexity and ambiguity of real-world decision-making and highlights how your choice of input assumptions can significantly affect the outcome.
For this assignment:
- Use the third quarter data from Table 3 to perform your breakeven analysis and answer the related questions.
This exercise is designed to help you think critically about cost behavior and pricing strategy in a dynamic business environment.
Flag question: Question 5Question 51 pts
Assume the company only sells Rubber Black. How many metric tons (hereafter, M.T.s) of Rubber Black must be sold quarterly to break even, using the third quarter data?
Enter your breakeven units here as a whole number, without any commas or any words.
Note: For breakeven units, the norm is to always round it up to the whole number. For example, if your answer is 4658.34, you will enter 4659. Because with 4658 units, the company still has a small loss and therefore has not yet broken even.
With that being said, please don’t worry about rounding issues. You won’t be penalized for rounding error.
Flag question: Question 6Question 61 pts
Assume the company only sells Pigment Black. How many M.T.s of Pigment Black must be sold quarterly to break even, using the third quarter data?
Enter your breakeven units here as a whole number, without any commas or any words.
Note: For breakeven units, the norm is to always round it up to the whole number. For example, if your answer is 4658.34, you will enter 4659. Because with 4658 units, the company still has a small loss and therefore has not yet broken even.
With that being said, please don’t worry about rounding issues. You won’t be penalized for rounding error.
Flag question: Question 7Question 72 pts
How many M.T.s of total carbon blacks need to be sold to break even quarterly if the product mix of Rubber Black and Pigment Black is 50 to 50 in sales volumes (M.T.), using the third quarter data?
Enter your breakeven units here as a whole number, without any commas or any words.
Note: For breakeven units, the norm is to always round it up to the whole number. For example, if your answer is 4658.34, you will enter 4659. Because with 4658 units, the company still has a small loss and therefore has not yet broken even.
With that being said, please don’t worry about rounding issues. You won’t be penalized for rounding error.
Flag question: Question 8Question 82 pts
How many M.T.s of total carbon blacks need to be sold to break even quarterly if the product mix of Rubber Black and Pigment Black is 20 to 80 in sales volumes (M.T.), using the third quarter data?
Enter your breakeven units here as a whole number, without any commas or any words.
Note: For breakeven units, the norm is to always round it up to the whole number. For example, if your answer is 4658.34, you will enter 4659. Because with 4658 units, the company still has a small loss and therefore has not yet broken even.
With that being said, please don’t worry about rounding issues. You won’t be penalized for rounding error.
Flag question: Question 9Question 92 pts
Assume the company sells only Pigment Black. Compute the amount of M.T.s that need to be sold to reach a quarterly target after-tax profit of $80,000, using the third quarter data. (The tax rate is 20%.)
Enter your breakeven units here as a whole number, without any commas or any words.
Note: For breakeven units, the norm is to always round it up to the whole number. For example, if your answer is 4658.34, you will enter 4659. Because with 4658 units, the company still has a small loss and therefore has not yet broken even.
With that being said, please don’t worry about rounding issues. You won’t be penalized for rounding error.
Flag question: Question 10Question 105 pts
Please upload the Excel spreadsheet you used to calculate breakeven units.
- Your submission must be a single Excel file that includes all relevant worksheets. Include your completed Table 1 and Table 3 in the file. Please skip Table 2 and the Optional Sensitivity Analysis sheet, which we worked on during class.
- Ensure that your answers to Q5 to Q9 are clearly labeled within the spreadsheet so we can easily identify which response corresponds to each question.
- Wherever appropriate, your Excel cells should contain formulas that clearly illustrate the calculation process behind each value. This allows us to verify your methodology and supports best practices in financial modeling.
Upload
Flag question: Question 11Question 118 pts
Evaluate the strategic decision (150 to 250 words): Based on your analysis of the case, do you agree with Mei Chen’s strategy to pivot from selling Rubber Black to Pigment Black? Provide well-reasoned arguments supported by both quantitative and qualitative insights from the case.
In your response, discuss how Pigment Black and Rubber Black differ in terms of:
- Supply conditions
- Market demand
- Competitive landscape
- Contribution margin ratio and breakeven units
Your discussion should be closely tied to the case details and reflect a clear understanding of the strategic implications for Jinchang Chemical Export Inc. Be sure to use factually accurate information and demonstrate critical thinking in your evaluation.
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Flag question: Question 12Question 124 pts
Personal Connection Reflection (100 to 200 words): Reflect on the case study and identify two aspects that connect to your personal work experience. Consider whether your company or industry has been impacted by environmental or other regulatory changes, and describe how your organization responded to those challenges.
Alternatively, if you do not have relevant work experience, you may discuss two aspects of the case that you found particularly interesting or surprising, explaining why they stood out to you.
Your response should demonstrate thoughtful engagement with the case and, where applicable, draw meaningful connections to real-world business contexts.
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Flag question: Question 13Question 131 pts
AI Use Disclosure
In the space below, please provide the following information if you used any generative AI tools while completing this assignment:
In this assignment, I used the following AI tool(s): [name the specific tool(s), e.g., ChatGPT, Copilot, Gemini, etc.]. I used them to [briefly describe the purpose, e.g., understand concepts, brainstorm ideas, outline content, clarify concepts, edit writing, etc.] for questions [indicate which question].
If you did not use any generative AI tools for this assignment, please include a brief statement indicating that no AI tools were us