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5 units. What is the maximum amount of costs that Snyder could save by downsizin

ID: 2404986 • Letter: 5

Question

5 units. What is the maximum amount of costs that Snyder could save by downsizing software imple- mentation support capacity? Suppose Snyder can add or reduce its software implementauo supp 3. Snyder, in fact,does not eliminate any of its unused software implementation support capacity. Why might Snyder not downsize? Growth, price-recovery, and productivity components. Lakeside T-Shirt Company sells a variety shirts. Lakeside presents the following data for its first two years of operations, 2015 and 2016. For assume that all purchasing and selling costs are included in the average cost per T-shirt and that LO? 13-27 of T- simplicity, each customer buys one T-shirt. 2015 2016 Number of T-shirts purchased Number of T-shirts lost Number of T-shirts sold Average selling price Average cost per T-shirt Administrative capacity in terms of number of customers 200,000 2,000 198,000 $25.00 10.00 250,000 3,300 246,700 $26.00 $8.50 that can be served Administrative costs Administrative cost per customer Design staff Total design costs Design cost per employee 3,750 4,000 $1,200,000 $1,162,500 $310 $250,000 $50,000 $275,000 $55,000

Explanation / Answer

Ans:   cost leadership means producing products that are cheaper than the competitors. When a company adopts   this leadership strategy it means that company is selling more units at   lower margin per unit.

The above company is following cost leadership because the average cost per T-shirt has been reduced from $ 10 to $8.50 and each customer buys one T-shirt and all the units purchased except those of lost are sold.

Ans: Balanced scorecard is a method used to analyze and measure the financial performance of an organization. The company should include the following terms in the balanced scorecard:

Particulars

2015

2016

particulars

2015

2016

To purchase

To Gross profit

To administrative cost

To design cost

To operating profit

2000000

2970000

2125000

4703050

By sales

By abnormal loss

By Gross proft

4950000

20000

6800000

28050

4970000

6828050

4970000

6828050

1200000

250000

1520000

1162500

275000

3265550

2970000

4703050

2970000

4703050

2970000

4703050

#note: abnormal loss is calculated at   cost price and is shown in the credit side of trading account as it is treated as closing stock.

Particulars

2015

2016

particulars

2015

2016

To purchase

To Gross profit

To administrative cost

To design cost

To operating profit

2000000

2970000

2125000

4703050

By sales

By abnormal loss

By Gross proft

4950000

20000

6800000

28050

4970000

6828050

4970000

6828050

1200000

250000

1520000

1162500

275000

3265550

2970000

4703050

2970000

4703050

2970000

4703050

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