The Chief Financial Officer of the company, Lester Ledger, feels that the product lacks the aesthetic appeal and suggests repackaging them in designer bottles. This will increase the variable cost per unit by $ 4.75 and the fixed production costs will increase by $ 40,000 per year. He predicts that the sales volume will increase by 32 % (264,000 units). However, the increase in sales does not outdo the increased costs and the company will incur a loss of $ 1.334 million (as shown in Appendix 2).
According to the Production Manager, Buster Bumble, the reduction in the standard size of the bottle by 10 % would drop the variable costs by $ 2.65 (amounts to $ 13.35 per unit). However, due to the reduced size, the sales will drop to $ 195,500 units. Though the contribution margin is considerably increased, the company still incurs a loss of $ 549,425 (as shown in Appendix 3).
The marketing manager suggests that the product requires more promotion and an increase of marketing budget by $ 527,000 will be appropriate. This, combined with a price increase by $4.90 per unit will increase the sales volume by 17 % (234,000 units). The contribution margin is considerably increased as both the sales volume and the unit prices are higher than before. The increase in the contribution margin is significantly higher than that of the fixed costs and hence results in a profit of $ 129,600 (Appendix 4).
It is evident from the above analysis that the first three proposals still result in a heavy loss for The Lovely Scent Perfume Company. The proposal made by the marketing manager indicates an estimated profit of $ 129,600. Hence it is recommended that the company should increase the marketing budget (by $ 527,000) and also increase the price by $ 4.90 per ...
Cite this document
(“MOD 3 CA ACC Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
Retrieved from https://studentshare.net/miscellaneous/405581-mod-3-ca-acc
(MOD 3 CA ACC Essay Example | Topics and Well Written Essays - 500 Words)
“MOD 3 CA ACC Essay Example | Topics and Well Written Essays - 500 Words”, n.d. https://studentshare.net/miscellaneous/405581-mod-3-ca-acc.
These images when viewed at different angles against light, bring out different impressions. This includes movement, which brings the pictures made closer to the real, practical world. The pictures are bright, and pulsating with a lot of color and most of them are outdoor scenes.
He has fired one of his employees, Ms. Goodperson who had violated the decision rule and agreed to sell 700 units for $ 290 each.
It is evident that offers were made for a total of 1,875 units in the first month along with an additional offer for 700 units. This translates
If yes, then the mother should immediately be checked for complications. If complications are present, then the mother needs to be shifted to the intensive care unit (ICU) or operation room, as necessary. In case of no complications
From various research conducted, it is evident that the use of technology has resulted to the effectiveness and efficiency of social change especially in delivering of services to the public. In order for technology to have an impact
The date of soliciting the purchases is in December 2, 2009.
Following a mistake made in announcing the soliciting date, there was a need to provide accurate information to the public. For that reason, the amendments deemed necessary for the success of this project
It required proposals to be developed and submitted in line with RFP standards on requirements and instructions. The expectations was that multiple contracts be awarded from the solicitation through a single contract
a criminal trail include as Jury selection, Oath and Preliminary Instructions, Criminal trial, Jury Deliberations, Verdict, and Sentencing.Contract Management system at Edwards is good for alerting about the expiry dates of the contracts. Edward’s investment is capable to
6 Pages(1500 words)Essay
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Let us find you another Essay on topic MOD 3 CA ACC for FREE!