Swisher Mover

Swisher Mower and Machine Company Prosuce mowers Can non take advantage of tautological capacity for bestow not broaden their area of gross sales Will loose emf to make additional 8,200 friendly units But to make them at 2.55% reach margin is not worth it Alternative B ( study the private-label offer) Pros Additional establishment of 8200 mowers per year Almost triple the production of late years , and misc. cost increased COGS increases by 7.

5%/unit Added financial backing charge (appendix A3) Very express bar get aheading posture Alternative C (Increase Advertisement expen se by $25/unit) Pros Will increase sales Increases awareness for all mowers not just charge faggot Will be equal to s For 1997 Cons We allow for reach people that are not interested in buying a mower waste of advertising dollars Even if we gain additional 250 sales, our gross remuneration go away not pout the expenses (appendix C4) Contribution margin will decrease from $97 to $72 No way to reassure how many people we could reach or how many sales would result from advertisement Appendices: Appendix A1 Appendix A2 Ride King Proposed Private Brand Sales $650 Sale Price -5% $617.50 COGS $553 COGS $601.75 pains parts flagrant Margin whole voice whole component part margin 14.92%-2.55% =12.37% decrease in unit contribution margin stratum 2 Private-label Extra units = 8,200 Sales $5,063,500 COGS $4,934,350 Gross Margin $129,150 (cannibalization) $29,100 $650 sale price - $578 COGS/unit = $72/$650 = 11.1 % contribution margin $72 unit contributio! n orIf you want to get a full essay, order it on our website: OrderCustomPaper.com

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