A little producer of gas grills considering several changes in pricing, advertising, and merchandise availability and is making final changes to its 2009 operating budget. This short case addresses the topic of contribution evaluation as an easy way to analyze profit planning issues like adding or dropping a merchandise or service; altering a price; adding or reducing quantities that are anticipated; or preparing a profit budget.
bw manufacturing case solution
In this scenario there are three products, each with distinct proportions of variable and fixed costs. Before one is finally adopted as the plan for the year four distinct marketing plans are proposed. At year end, the real results can be compared to a flex or adjusted budget and to the budget based on the real product volumes comprehended. The numbers are not complex and the pupils can readily see the advantage of variable costing.
PUBLICATION DATE: July 08, 2009 PRODUCT #: UV1767-HCB-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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