Lambeth Custom Cabinets Essay

Mary should decrease her reservation price for the house because there is only one proposition; on the other hand, this couple seems to be very interested by her house. However, the reservation price cannot decrease until $170.000, but it cannot reach the $215.000 as well.

Compute the projected profit for the order quantities suggested by the management team under three scenarios: worst case in which sales = 10,000 units, most likely case in which sales = 20,000 units, and best case in which sales = 30,000 units.

The rise in revenue was rapid starting from the year of operations. The key period of business was from April to September were revenues were equal to 65% of total revenue as the product was seasonal. The basis of forecasting for the year 1981 & 1982 is the expectations of sales by Mr. Turner & Mr. Rose. It is given that total sales were $ 15.80 million in first half of year 1981 and the total sales in 1981 to reach $ 30 million. Profit after tax was expected to be $ 1 million for 1st half and we assumed for the next half, profit will be in proportion to first half & expected to be amounting to $ 0.90 million. For year 1982, the sales expectation by Mr. Rose was around more than $ 71 million &

1.For which of the following products would job order costing be least likely to be used?

1. The local Mastermind store sells innovative educational toys. Part of their service is giving advice to customers about the best toys for a particular age group, which requires having more customer service representatives in the store. During the month long Christmas buying season, it makes half of its $500,000 yearly sales. Its contribution margin on average is 40% and its fixed costs for the year are about $150,000. The owner believes that she could make even higher sales, if she had more customer service representatives on the floor during the peak season. She plans on hiring four more people for 200 hours each at $20 per hour. How much additional revenue does she have earn to the nearest dollar

The installation of a berry grader would positively impact the cooperative’s income, while negatively impacting the farmers’ income. With the current system, 450,000 bbls. of berries are paid a premium of 50 cents per bbl, yet when the berries are used only about half of them are actually considered No. 3’s (berries with the best color). So basically, the cooperative is paying a premium on 225,000 bbls. more than it should be, and that worked out to about $112,500 in 1970. It would cost the cooperative $10,000 to install a berry grader, plus the cost of another full-time skilled operator, but it would still impact their income greatly. The farmers’ would probably prefer that the cooperative continue to grade the color using pictures as a guide, because they are being paid a 50 cent premium on about half of their No. 3 berries that should actually be considered No. 2B.

v. What are the limitations, if any, to the estimates of the profitability of the two customers? (Hint: Consider what improvements could be made to the accounting system to obtain more accurate costs)

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Linda should follow the fourth alternative where the total cost involved is the most appealing factor economically to the organization. Even though there is a huge amount held in inventory holding costs, this will definitely help later when there is a sudden change in the forecasted demand

First, we have identified if there is really an insufficiency in the amount of selling prices set by the Sales Department, in reference to Exhibit 1 of the case. We did this through identifying the maximum amount of overhead costs that the company can incur for the three products and comparing it with the total overhead costs. See Table 1 for details.

Loss in CS = A + B + D + C = 124.08 + 105.6 + 39.6 + 25.08 = 294.36 (about $2.9 billion)

According to Randy, as the technicians go on the field to rectify a complain there are often out of spares which in return infuriates the customers. In such situations, Randy has often tried to do damage control by offering the customer a discount or compensation for the lapse on service. Which I feel is a very good move but as this is a high frequency case, the finance department has called for a stop to this practice and therefore has made Randy unable to control the after effects of a failed service like.

acture its hoists in-house or outsource it to a contractor, they need to assess each option in terms of total unit costs which will affect its net income as shown below:

The slight high cost could be due to the high quality construction and materials used.

Since he could understand price was her concern, he could make it appear like she’s getting a high discount.