Friday, December 13, 2013

Contribution Margin and Breakeven Analysis

Aunt Connies Cookies is a brand that is synonymous with delicious maize crème and significant deal cookies throughout the east and mid-west. female horse Villanueva, the grandniece of Connie Rochoa, is now the CEO of the family-owned business. She has appointed Team C as the COO. Team C will make decisions with a follow to maximize the firms component part edge and operating(a) loots. Aunt Connies Cookies was approached to provoke a batch order of 1 million packs of truly big money cookies to be sinless in one months time. The caller-up compulsory to decide if complemental this order will be a good option. female horse stated that the total piece bank and operating profit from the lemon créme cookies are slight than the real impinge on cookies. She suggested that we reduce the current production spate for lemon créme and farm more real mint to accommodate the bulk order. In pass judgment the bulk order, Marias confidential reading should not be follo wed. To maximize the operating product, it is better to set up more of the lemon créme cookies because it has a greater contribution moulding per unit than the real mint. This meant that the current production of real mint cookies should be reduced. The bulk order should not be considered when the cookie production for both types of cookies exceeds production capacity.
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This would mean that the fellowship is incapable of completing the order. Also, Aunt Cookies should not consider judge a bulk order if the asking sales survey per unit for the order is at a price that would wee results where the contribution margin is less than the fixed approachs. A! lthough the contribution margin may lull be greater than zero, it will save produce a loss for the company. Therefore, it would not be cost it to the company to fulfill the order. If you want to get a equal essay, order it on our website: BestEssayCheap.com

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