analysis4.1 - AC2720 Module 4 Cost Allocation Analysis 4.1...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
AC2720: Module 4 Cost Allocation Analysis 4.1 Strategic Profitability Analysis 1 There are three problems in this assessment. You need to complete all the three problems. Problem 1: Strategy, Balanced Scorecard, Merchandising Operation Ramiro & Sons buys T-shirts in bulk, applies its own trendsetting silk-screen designs, and then sells the T- shirts to a number of retailers. Ramiro wants to be known for its trendsetting designs, and it wants every teenager to be seen in a distinctive Ramiro T-shirt. Ramiro presents the following data for its first two years of operations, 2012 and 2013: 2012 2013 1 Number of T-shirts purchased 225,500 257,000 2 Number of T-shirts discarded 20,500 24,000 3 Number of T-shirts sold (row 1 (row 2) 205,000 233,000 4 Average selling price $32.00 $33.00 5 Average cost per T-shirt $17.00 $15.00 6 Administrative capacity (number of customers) 4,700 4,450 7 Administrative costs $1,739,000 $1,691,000 8 Administrative cost per customer (row 8 ÷ row 7) $370 $380 Administrative costs depend on the number of customers Ramiro has created capacity to support, not on the actual number of customers served. Ramiro had 4,300 customers in 2012 and 4,200 customers in 2013. Answer the following questions: 1. Is Ramiro’s stra tegy one of product differentiation or cost leadership? Explain.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern