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Week 3 - Team A - Managerial Analysis PowerPoint - Final

Week 3 - Team A - Managerial Analysis PowerPoint - Final -...

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Team A Brenda Shively, Dawn Manzano, Fausto Trejo, Mary Jo Buchanan, Jamie Smith Managerial Analysis
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Silver Star  Cost to purchase for the first 6 months $11.00 Manufacturing Cost $5,000 Total Cost $60,000 Cost per Unit 12.00 Profit Margin for 5,000 @ 14.50 $ 72,500 Profit Margin 12,500 or 2.50 per unit First 6 months
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Alpha Products Cost to purchase 5000 at $ 4.00 for a total of $ 20,000. Manufacturing Costs $5,000 Total Cost for Production 25000 for 5000 Profit Margin of 9.50 per clock for a total of $47,500
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Technology Plus  Cost per unit to produce 6.65 Per Unit @ 5000 Units that are needed for Kmart the total cost is $ 33,250.00 Profit Margin 39,250 for the total Purchase or 7.85 per Unit.
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Important Nonfinancial Factors Make or buy Opportunity Cost Retain or replace equipment Eliminate an unprofitable segment
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MAKE OR BUY The decision to buy parts or services is often referred to as outsourcing Management must decide whether to make or buy the components
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Unformatted text preview: OPPORTUNITY COST The cost of passing up the next best choice when making a decision The potential benefit that may be obtained by following an alternative course of action RETAIN OR REPLACE EQUIPMENT Management has to decide whether to continue using an asset or replace it W hat should Technology Plus do with the K-Mart order and the Multi-Alarm clocks? Management must decide whether to eliminate an unprofitable business segment or outsource their multi-alarm clocks with either Silver Star or Alpha Products. Management should outsource to Silver Star and retain K-Mart’s order. REFERENCES: Weygandt, J. J., Kieso, D. E., & Kimmel, P. D. (2005). Managerial accounting: tools for business decision making [Chapter 6]. Retrieved from https://ecampus.phoenix.edu/content/ eBookLibrary2/content/DownloadList.aspx? assetMetaId=2bdf51c3-796a-4e0b-8400-37d894ccc000&assetDataId=3 799f54e-0c61-4d6e-a6f1-786fb0fb2b23...
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