The owners wanted to know the impact of dropping Grill A from their line of products. Richardson was told to assume that the volumes and selling prices of the other two products would be the same whether or not the Grill A product line was dropped. 2. Should BW lower the price of Grill C? The owners wanted to know the impact if they lowered the price of Grill C to $75 and if doing so led to a 20,000-unit increase in sales of Grill C. 3.
This issue can be related back to chapter 6 which was over creating the master budget. The benefit of creating a master budget is for situations such as deciding to produce Grill A or not. It allows the company to analyze the risks of not producing Grill A, and the opportunities they could possibly gain by this decision. From the information provided in Exhibit 1, with producing Grill A, the gross margin is $18,400,000 and the operating income is $6,950,000. The calculation of the gross margin with only producing Grill B and C decreases to $10,880,000 and the operating income becomes $ -570,000.
Custom aircraft builder Job-Order iii. Brick manufacturer Process Costing iv. Microbrewery that produces a number of different beers Job-Order v. Steel company making chain link fences from iron ore Process Costing Required: For each company, indicate whether the company is most likely to use job-order costing or process costing. (Points : 15) i. Specialty coffee roaster (roasts small batches of specialty coffee beans) Job-order ii.
In a couple of sentences or so, discuss how you would improve the Deli Depot questionnaire? From what I earned in chapter 8, I find the deli depot questionnaire is suitable, but there are some unsuitable or wrong questions for example: 1. Is your annual household income $20,000 or more? __ Yes __ No * This is a sensitive question they should delete it from the survey. * Moreover, it is not clear if they do screen equations or not because it is important to do it as
Cons: Retails could by less baking soda and could probably decide to sell baking soda at a higher price, which could deter some existing costumers from buying again. Option 2: Since a 40% of consumers use coupons when purchasing baking soda the brand director could attempt to increase consumer promotions. Pros: There has been some success in the past to this method and there is also an emerging trend of coupon clippers as mentioned in the case. Cons: This would lower the amount of revenue per unit sold and although consumer like to use coupons when purchasing baking soda, a heavy user of the product only purchases 5 times a year. Option 3: Increase the turnover rate of baking soda by introducing freshness indicator in the small 8oz packages of baking soda.
However, EU producers are looking to cut subsidies on the production of olive oil, which would increase the price to Pe and decrease the quantity supplied and quantity demanded to Qe. These measures are all in favor of non-European olive producers, since the competitiveness is improved as the price of European olive oil approaches the world
Pricing 4. Production The action plan brand managers Boyle and Warren should propose is to focus primarily on instant charcoal, as it is easier to compete when it comes to finding new customers against gas grilling. They should propose a price increase of 5% for all products. There should be no increase in production for the time being. There should also be increases in both promotion and advertising.
Why not exempt the cost of food from taxes if provided by the employer? It's a way of forcing healthy young people to pay for insurance they might not otherwise purchase individually, so you can insure sick older people at a reduced cost? At 3/05/2012 10:20 PM, Mark J. Perry said... Why don't employers then provide car insurance and homeowner's insurance for their employees? And food, clothing, electronics, autos, etc. all at group discounts?
However, if the demand is inelastic (not likely to be true), then Apple should preserve its profit margins. Answer 2: P= 4,500-.15Q Total Revenue = PxQ = 4,500Q - 0.15Q^2 Marginal Revenue = 4,500 - 0.30Q For Profit Maximization MC = MR Thus 1500 = 4,500 - 0.30Q => Q = (4,500 - 1,500)/0.30 => Q = 3,000/0.30 => Q = 10,000 Put Q = 10,000 in the demand function to ge the price: P = 4,500 - 0.15x10,000 = 3,000 Thus Apple should price its product at 3,000 and sell 10,000 units. Answer 3: Power Mac's user value had fallen by 600. This means that the demand curve has further shifted to the left by $600. Thus the new demand curve will be P = 4500 - 600 - 0.15Q => P = 3900 - 0.15Q If Apples stays at the $3000 price mark then quantity will be: 3,000 = 3,900 - 0.15Q => 900 = 0.15 Q => Q = 6000 Thus sales will fall from 10,000 units to 6,000 units if Apple held its price of $3000 P= 3,900-.15Q Total Revenue = PxQ = 3,900Q - 0.15Q^2 Marginal Revenue = 3,900 - 0.30Q For Profit Maximization MC = MR Thus 1350 = 3,900 - 0.30Q => Q = (3,900 - 1,350)/0.30 => Q = 2,550/0.30 => Q = 8,500 Putting Q = 8,500 in the price function we get P = 3,900 - 0.15x8500 => P = 2,625 Thus according to the new policy Apple should see 8,500 units at $2,625 per
One suggestion is that the company reposition its water as a premium product, justifying a higher price. If successful, the company believes that it could charge 20% more for its water than it does now. 1. What is the maximum sales loss (in % and units) that Healthy Spring could tolerate before a 20% price increase would fail to make a positive contribution to its profitability? The maximum sales loss would be 25% before they can tolerate before a 20% price increase, which amount to 1,500 bottles per day instead of 2,000.