Principles of Marketing GIMS – PSG Coimbatore Winter Semester 2013/14 Day 2 Prof. Dr. Wengler Page 56 Day 2 Principles of Marketing GIMS – PSG Coimbatore Winter Semester 2013/14 What did you learn yesterday? Prof. Dr. Wengler Page 57 Day 2 Principles of Marketing GIMS – PSG Coimbatore Winter Semester 2013/14 Questions regarding the reading? Prof. Dr. Wengler Page 58 Day 2 Principles of Marketing GIMS – PSG Coimbatore Winter Semester 2013/14 Current Economic (World)
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manufacturing overhead costs to products produced in varying lot sizes? (Points : 11) A single cause-and-effect relationship Multiple cause-and-effect relationships Relative net sales value of the products A product’s ability to bear cost allocations EXPLANATION: Instead of using a single allocation base for overhead, and ABC system determines the multiple activities associated with the incurrence of costs and then accumulates a cost pool for each activity
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Imagine you are a decision maker in Unilever or P&G, what kind of strategy would you take to prevent significant fall off in volumes or revenues when you price the product? As a decision maker in Unilever, a multinational company involved in the production of consumer goods and services, the strategy that would be taken to prevent a significant fall in volume sold or revenue being received would be as follows: Pricing is extremely important to any producer because depending on the
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Value $ Sales Profit Break-even Point Variable costs Total costs Current sales level Fixed costs 0 0 Units sold Break-even Chart 1200 Total revenue Dollars (in thousands) 1000 Target profit Total cost 800 600 400 Fixed cost 200 0 10 20 30 40 50 Sales Volume in Units (in thousands) Break-even Volume 35 30 25 $ Millions 20 15 10 Total Revenue Total Costs Fixed Expenses* 5 0 50 100 Break-even Volume (90,000) 150 200
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Procedures 10,000 Budgeted Cost$400,000 Desired Profit $80,000 It is estimated that Medicare patients comprise 40 percent of total radiology volume and will pay on average $38.00 per procedure. Approximately 10 percent of the patients are cost payers. The remaining charge payers are summarized below: Payer Volume % Discount % Blue Cross 20 4 Unity PPO 15 10 Kaiser 10 10 Self Pay 5 40 50% What rate must be set to generate the required $80,000 in profit in the preceding example?
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Investments in the cement industry of Pakistan The construction and material sector of Pakistan is supporting like the right hand in the economy of Pakistan. Though the cement industry in Pakistan has witnessed its lows and highs in recent past, it has recovered during the last couple of years and is buoyant once again. Pakistan cement factories continue to make significant progress in cement exports. The industry is contributing around Rs. 30 billion per annum to the national exchange in the shape
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10.86% of revenues and Ambulatory Detoxification generates 21.8% of revenues. An important aspect of cost-volume-profit analysis is sensitivity analysis. Discuss the nature of sensitivity analysis and why it should be a part of cost-volume-profit analysis. Define the concepts “committed fixed cost” and “discretionary fixed cost.” Discuss the implications that each of these categories of fixed costs has for both short-term and longterm planning within the organization. Bridgestone is a nonprofit
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pay for online and drive-thru grocery shopping. In addition, we will not have many variable costs in developing our product. Most of our costs will be fixed which will mean we can get a great estimate on the initial costs associated with bringing this service to market. Our fixed costs will be staffing and marketing efforts. We can put as little or as much into marketing as we deem necessary. The costs associated with marketing will not be very high; Kroger has a great online following on their
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U 1-2. 1. Cost of goods sold $126,000 2. Cost of goods sold $293,000 1-3. 2. Gross profit on sales $ 25,850 Net income $ 10,650 3. Total assets $442,100 1-4. 3. Cost of goods manufactured $ 91,000 Net income $162,850 1-5. 8. Dr. to Work in Process (Factory Overhead) $76,900 1-6. 1. Cost of goods manufactured $348,000 2. Prime cost $264,000 3. Conversion cost $240,000 1-7. Cost of goods manufactured…………………………………………
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each. It uses an absorption costing system. Plant capacity is 700,000 units per year, but normal volume is only 500,000 units. Costs per unit at normal volume are as follows: Materials P20 Labor 10 Factory Overhead 24 Selling and administrative 15 Total costs P69 Annual fixed costs are: Factory overhead P 5,000,000 Selling and administrative 3,000,000 Total Costs P 8,000,000 During the month, a customer has offered to buy 80,000 units at P60 per unit
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