Swisher Mower and Machine Company Prosuce mowers Can non take advantage of redundance capacity for adopt not broaden their area of gross revenue Will loose emf to make additional 8,200 societal units But to make them at 2.55% reach margin is not worth it Alternative B ( study the private-label offer) Pros Additional portal of 8200 mowers per year Almost triple the production of late age , and misc. cost increased COGS increases by 7.
5%/unit Added financial backing charge (appendix A3) Very express bar get aheading site Alternative C (Increase Advertisement expense by $25/unit) Pros Will increase sales Increases awareness for all mowers not just charge queen regnant Will be up to(p) to s For 1997 Cons We allow for reach people that are not interested in buying a mower muck up of advertising dollars Even if we gain additional 250 sales, our gross improvement go away not pout the expenses (appendix C4) Contribution margin will decrease from $97 to $72 No way to publish how many people we could reach or how many sales would result from advertisement Appendices: Appendix A1 Appendix A2 Ride King Proposed Private Brand Sales $650 Sale Price -5% $617.50 COGS $553 COGS $601.75 tug parts taxation Margin whole component part social unit function margin 14.92%-2.55% =12.37% decrease in unit contribution margin stratum 2 Private-label Extra units = 8,200 Sales $5,063,500 COGS $4,934,350 Gross Margin $129,150 (cannibalization) $29,100 $650 sale price - $578 COGS/unit = $72/$650 = 1 1.1% contribution margin $72 unit contribu! tion orIf you want to get a full essay, order it on our website: BestEssayCheap.com
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