This new specific purpose design with higher torque will also cost much more to manufacture, approx $665 per motor. It will be priced at $1045, leaving a smaller margin than any other motor DMC manufactures. 2. Assuming same retail price, customer would pay $1,045 plus usage costs of 60*$125 = $7,500 so grand total of $8,545 over 5 years. Persuade Bridges that test results are weighted too heavily on starting torque: 1.
There were also risks involved with this decision. Creating a comprehensive advertising plan would cost Natureview $1.2 million per region per year. These were in addition to the trade promotion expenditures the company would need to make. “Natureview's sales, general, and administrative expenses (SG&A) would increase by $320,000 annually; $200,000 would be incremental SG&A for additions to sales staff required to manage the supermarket brokers in the two regions, and $120,000 would go towards additional marketing staff.” Option 2 had three main advantages as well. 32-oz cups currently generated a higher than average gross profit margin for Natureview, despite comprising a smaller unit and dollar share of the yorgurt market.
If Tyrene Products wants to maintain the same CM ratio as last year, what selling price per skateboard must it charge next year to cover the increased labor costs? * 5. Refer to the original data. The company is considering the construction of a new, automated plant. The new plant would slash variable costs by 40%, but it would cause fixed costs to increase by 90%.
Camus Blalack, process engineer, knows that the acceptance of a new process design will depend on its economic feasibility. The new process is designed to improve environmental performance. On the negative side, the process design requires new equipment and an infusion of working capital. The equipment will cost $300,000, and its cash operating expenses will total $60,000 per year. The equipment will last for seven years but will need a major overhaul costing $30,000 at the end of the fifth year.
With today’s prices at 38 cent a gallon. However, a lower speed limit saves approximately 167,000 barrels of oil per day and would save approximately 6,400 lives a year.” (Dunn, William N. (2012), Para. 3. P. 24). Warrant 1: While reducing the speed limit can increase the fuel efficiency on the vehicles.
With today’s prices at 38 cent a gallon. However, a lower speed limit saves approximately 167,000 barrels of oil per day and would save approximately 6,400 lives a year.” (Dunn, William N. (2012), Para. 3. P. 24). Warrant 1: While reducing the speed limit can increase the fuel efficiency on the vehicles.
The test market showed that only 6 percent of the market tried product and of those 6 percent 30 percent bought 3 times their initial purchase. Let us assume that the factors of the test market are mirrored once they distribute to the 19 cities in the southern tier of the U.S. Table 1 below shows the potential profits given the same variables as the test market with a few changes. The biggest change is the fixed costs adjusted for a bigger market. Since the new market is roughly 4 times the size of the test market, I multiplied the expenses to match the new market accordingly. The test market numbers given in Table 1 shows a loss of $1,204,150, which is mostly attributable to the high market expenses.
Another alternative being considered is paying the store manager a 50 cent commission on each shoe sold in excess of the break-even point. Being that 2,500 shoes were sold in excess of the 12, 500 shoes needed to break-even, the operating income has increased and is now approximately $40,000. Lastly, eliminating sales commissions entirely in the shops and increasing fixed salaries by $31,500 annually will make the break-even point for units sold 11, 000 and dollar sales
The firm will be able to retire the loan of $400,000 on June 30, 2009. Sunspot Skis can generate sufficient internal funds from profit, depreciation, and liquidation of inventory and reduction of collection period for account receivable. Sunspot Skis has longer Average collection period of 49.6 days, comparing to the industry average of 32 days.This shows that Sunspot Skis made a lot of sale on credit. The firm can generate fund by reducing its Account Receivable and collection period in the year 2009. Average collection period = ( 365 * AR ) / Credit Sale Expected Sale Year 2009 = 2,900,000 Account Receivable (Year 2009) = 32* 2,900,000 / 365 = 254,246 Account Receivable (Year 2008) = 388,000 Additional internal fund = 388,000 – 254,246 = 133,754 Sunspot Skis also holds too much inventory ( $826,200) that leads to low Inventory utilization ration 3.5, whereas the industry average is 7.
To achieve the company’s stated CSR objectives REI has instituted an employee commuting policy, climate-neutral travel framework, and improved shipping procedures based on the greenhouse emission metrics. As a result, while 2010 sales increased 14% from 2009, its total climate impact increased by less than 7.3%. The addition of four new stores and moving two locations to larger spaces, has allowed REI to decrease its energy consumption by 2.4%. Beyond energy efficiency initiatives, REI took additional steps to decrease waste and its total paper consumption. Although REI admits it still has a very high rate of paper usage, because of its direct mail campaigns and catalogs, the company has taken steps to optimize its catalogs, use electronic means of advertising such a mobile phone and internet and also increased the share of FSC-certified