ACCOUNTING-202-MOD--3-CASE - This would involve an increase...

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ACCOUNTING 202 MODULE 3 CASE ASSIGNMENT DR. WENDY ACHILLIES Looking at the powerpoint presentations and other source material made Contribution Margin fairly simple. Looking at the Case Assignment and trying to input the numbers became a little confusing. I think it was the percentages that may have confuse me whether to involve them in the equation or leave them out. As I looked at Wally’s proposal who wanted to drop the price by 20% from $35.00 to $28.00 per unit who said this will increase sales by 85,000 units per year. This would make the units produced and sold increase from 200,000.00 to 285,000.00.
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Unformatted text preview: This would involve an increase in revenue from 7,000.000.00 to 7,980,000.00. Variable cost to 5,700.000.00. The contribution margin would decrease from 3,000,000 to 2,280.000. I do not believe this to be beneficial for Lovely Scent to rely on. Lester proposed to add $4.75 per unit for designer bottles increasing variable production cost from $16.00 to $20.75. This proposal, regardless of the new bottles would increase variable and fixed cost. Revenue would remain the same at 7,000.000 minus 4,950.000 this brings the contribution margin to 2,050.000....
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This note was uploaded on 10/26/2011 for the course ACC 202 taught by Professor Choi during the Fall '11 term at Trident Technical College.

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