For this assignment you will analyze a short term business decision such as the
ID: 2430379 • Letter: F
Question
For this assignment you will analyze a short term business decision such as the addition of a new business, the purchase of additional equipment, or a decision on whether to make or buy a product. This can be for a real or fictitious business (you can make up numbers if needed).
1. Describe the short-term business decision and the type of business including whether it is a real or fictitious business.
2. Calculate both revenue and cost using proper classification.
3. Prepare a report outlining your findings.
4. Explain based on your calculations and findings whether or not you would make the investment.
Be sure to include the instructions in your submission. Assignments not submitted in accordance with instructions are subject to penalty.
Explanation / Answer
1. It is a real business choosing between whether to promote perfume or promote moisturizer.
2.
3
4. Manager would take the decision to produce perfumes as it gives additional income.
Differential Analysis Promote Moisturizer Promote Perfume Differential Effect on Income Revenue $ 35.00 $ 55.00 $ 20.00 COSTS Direct Labour $ (12.00) $ (20.00) $ (8.00) Direct Material $ (8.00) $ (10.00) $ (2.00) Sales Promotion $ (3.75) $ (5.00) $ (1.25) Variable Factory OH $ (3.00) $ (6.00) $ (3.00) Variable Selling OH $ (2.00) $ (3.00) $ (1.00) Income (Loss) $ 6.25 $ 11.00 $ 4.75 No. of Units 40000 30000 $ 250,000.00 $ 330,000.00 $ 80,000.00Related Questions
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