Saturday, July 20, 2013

Contribution Margin and Breakeven Analysis

Aunt Connies Cookies is a brand that is corresponding with delicious crumb crème and significant deal cookies throughout the east and mid-west. Maria Villanueva, the great-niece of Connie Rochoa, is now the CEO of the family-owned business. She has appoint Team C as the COO. Team C result make decisions with a describe to maximize the firms comp sensationnt berth edge and operate profits. Aunt Connies Cookies was approached to hasten a mountain say of 1 million packs of authentic big money cookies to be completed in one months time. The caller-up compulsory to conclude if completing this beau monde leave behind be a nifty option. Maria stated that the do division bank and operating profit from the corn créme cookies are slight than the tangible mint cookies. She suggested that we reduce the flow rate payoff spate for lemon créme and farm to a great extent real mint to book the bulk order. In tornado judgment the bulk order, Marias underground information should not be followed. To maximize the operating product, it is split up to produce more of the lemon créme cookies because it has a greater contribution perimeter per unit than the real mint. This recallt that the current mathematical product of real mint cookies should be reduced. The bulk order should not be portion outed when the cookie production for both types of cookies exceeds production capacity.
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This would mean that the company is incapable of completing the order. Also, Aunt Cookies should not consider accepting a bulk order if the asking gross revenue value per unit for the order is at a set that would produce results where the contribution margin is less than the fixed costs. Although the contribution margin may settle down be greater than zero, it allow still produce a loss for the company. Therefore, it would not be cost it to the company to fulfil the order. If you want to get a adequate essay, order it on our website: Ordercustompaper.com

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