Optical Distortion Inc. Case Spreadsheet 3f1x3a

Variable Cost per lens pair Manufacturing Cost Injection Mold Cost per lens Cost of plastic box Filling cost of box Order Processing Total Variable Cost

$ $ $ $ $ $

0.03200 0.00080 0.00040 0.00056 0.00072 0.03448

Break-even analysis Sales Price $ 0.08 Variable costs per pair $ 0.03448 Contribution Margin $ 0.04552 Fixed Costs $ 955,000.00 Break-even point 20,979,789.10 Break-even Sales $1,678,383.13

Annual Fixed Cost (for 1st year) Payment to New World Plastics Regional Office and Warehouse in California Headquarter Cost Advertising Trade Shows Salespersons cost Technical representative cost Total Fixed Costs

$ 25,000.00 $ 196,000.00 $ 184,000.00 $ 100,000.00 $ 100,000.00 $ 280,000.00 $ 70,000.00 $955,000.00

(Assuming volume at 20 million pair in 1st year)

No. of farms in california with flock size greater than 20000 No. of Salespersons No. of Technical representatives

521 (Exhibit 3) 7 2

Reduction in Mortality Earlier Mortality New Mortality Savings

9% 4.5% 4.50%

Purchase Cost per hen Allocation for replacing dead birds Percentage Expected new mortality New Allocation Savings per bird Savings per Dozen Eggs

$ $

$ $ $

2.40 (Exhibit 5) 0.21 8.75% 4.50% 0.11 0.1020 0.0046

Total Total Total Total

$ $ $ $

0.3695 0.0168 0.08 0.2895

Annual Savings per Bird Savings per Dozen Eggs Cost of Lens to farmer per bird Economic value added per bird

Flock Size Total Savings

20000 $5,790.01

50000 $14,475.03

Interest Savings (Exhib

100000 $28,950.07

Feed Savings Feed per 100 birds at 2" deep Feed per 100 birds at 1" deep Savings per 100 birds per day Savings per bird per day Savings per bird per day Annual Savings per Bird Annaul Savings per Dozen Eggs

$ $ $

24.46 23.68 0.78 pounds 0.0078 pounds 0.000559 0.2040 0.0093

erest Savings (Exhibit 5 - 8% interest cost on laying stock) Laying Costs Savings per Bird $ 0.1020 Interest Savings (@8%) per bird $ 0.0082 Interest Savings per Dozen Eggs $ 0.00037

Debeaking Trauma Loss No. of eggs lost annually per bird Cost per egg Total Cost savings per bird Total Cost Savings per Dozen Eggs

Labor Savings Labor Cost for debeaking per hour No. of birds debeaked in one hour Cost per bird Labor Cost for installation of lenses No. of birds lenses installed in one hour Cost per bird Savings per bird Savings per Dozen Eggs

2.4 $ 0.0227 $ 0.055 $ 0.0025

$

7.50 220 $ 0.0341 $ 7.50 225 $ 0.0333 $ 0.0008 $0.00003