Module3 Case Assingment ACC 202

Module3 Case Assingment ACC 202 - This would involve an...

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Module 3 Case Assignment ACC 202 Dr. Glenn Tenney
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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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Module3 Case Assingment ACC 202 - This would involve an...

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