MOD 3 CA ACC Essay Example | Topics and Well Written Essays - 500 words

MOD 3 CA ACC - Essay ExampleThe Chief monetary Officer of the company, Lester Ledger, feels that the product lacks the aesthetic appeal and suggests repackaging them in designer bottles. This will increase the variable equal per unit by $ 4.75 and the primed(p) production costs will increase by $ 40,000 per year. He predicts that the gross revenue meretriciousness will increase by 32 % (264,000 units). However, the increase in sales does not go around the increased costs and the company will incur a loss of $ 1.334 million (as shown in addition 2).According to the Production Manager, Buster Bumble, the reduction in the standard size of the bottle by 10 % would drop the variable costs by $ 2.65 (amounts to $ 13.35 per unit). However, due to the reduced size, the sales will drop to $ 195,500 units. though the contribution margin is considerably increased, the company still incurs a loss of $ 549,425 (as shown in Appendix 3).The merchandising manager suggests that the product requ ires more promotion and an increase of marketing reckon by $ 527,000 will be appropriate. This, combined with a price increase by $4.90 per unit will increase the sales intensiveness by 17 % (234,000 units). The contribution margin is considerably increased as both the sales volume and the unit prices are higher than before. The increase in the contribution margin is significantly higher than that of the fixed costs and hence results in a profit of $ 129,600 (Appendix 4).It is evident from the above analysis that the first tercet marriage offers still result in a heavy loss for The Lovely Scent Perfume Company. The proposal made by the marketing manager indicates an estimated profit of $ 129,600. Hence it is recommended that the company should increase the marketing budget (by $ 527,000) and also increase the price by $ 4.90 per