The incremental costs for the additional 50,000 jars are $64,000. b. If Santiago’s reduces the price by $.40, they would sell an additional 50,000 jars. This would bring in a revenue of $1,725,000, versus $1,625,000 if they sell at $5 per jar. The incremental revenue would be the additional revenue ($100,000) – the incremental costs ($64,000), which equals $36,000. c. Santiago’s should lower the prices, as the incremental revenue would be more than the incremental costs. Problem 4 a. It would
Words: 323 - Pages: 2
where prices respond to supply and demand pressures in real time or near-real time — is making inroads in many different sectors, including apparel, automobiles, consumer electronics, personal services (such as haircuts), telecommunications and second-hand goods. The advent of the Internet led to cost transparency, decreased search costs and ease of price comparison. Some observers concluded that as a result, prices would decrease and equalize across different channels, and that fixed prices would
Words: 6717 - Pages: 27
clothes, and JC Penny was at the upper echelon of clothing and home decor. So what happened? Both the stores have lost out on the supremacy throughout the United States. With the injection of the likes of Walmart back in the 90s, with their cheaper prices, those loyal to JC Penny and Sears left to Walmart. Then the Internet age came around, with the on-line retail giants such as Amazon and eBay, ultimately put JC Penny on the brink of collapse. But then enter former Apple executive Ron Johnson, and
Words: 1070 - Pages: 5
In today’s society, there are many accessories that we use daily that make our lives much easier & manageable. At Manola Sunglasses, we’ve created sunglasses that can be used for all purposes, styles, and more durable than any other sunglasses. Any company can make any type of sunglasses now a days, but our “Manolas” sunglasses are fashionable & stylish for all ages, and are overall all-purpose sunglasses. Purposes such as; driving, sports, fashion, safety guards, prescription uses &
Words: 478 - Pages: 2
scholarship, and grants one may receive. Another expense that students must worry about is the price of college text books. Although books are very crucial part of learning in college, they are beyond over prices and not all students can afford to purchase them. There are abundant of reasons why textbooks are so expensive. A primary reason why students cannot afford these text books because they are over price, especially of one decides to purchase their books from the bookstore on campus. It is clear
Words: 653 - Pages: 3
Decision Making Across the Organization Ramonica George ACC/561 January 14, 2014 Grace Kalil Decision Making Across the Organization When it comes to decision making across the organization, managers must have an understanding of cost effectiveness, selling, pricing, and budgeting. The organization must be able to accurately budget for variable cost as well as fixed cost while maintaining an increase in profit and revenue. In this paper, I will discuss the different view-points of decision
Words: 750 - Pages: 3
is that the variance due to operations was unfavorable. This means that areas where the costs have been higher than the budgeted costs require corrective measures. If we consider the manufacturing cost, the variable costs show that milk price variance and sugar price variance have been responsible for unfavorable variable costs. Similarly, higher fixed costs of repairs, electricity and water, and spoilage have been responsible for higher actual fixed costs. From the perspective of sales, the actual
Words: 530 - Pages: 3
FISHER PRICE TOYS I. PROBLEM This case study is a microcosm of the many concepts of marketing, many of them far removed from what appears to be a simple price-point problem. That price-point problem is stated in the beginning – a mold price for a projected toy can't be made for a budgeted price, thereby resulting in the need for a higher price. This was a strong point of departure for the Fisher-Price company, since few of its items had sold for more than $5. Hence Fisher-Price must decide
Words: 1885 - Pages: 8
erroneous estimation of costs due to the long length of time considered in the estimates. Costs of raw materials and manufacturing equipments can have very rapid fluctuations in prices within a year, and if they base their costs only annually, it might lead to innacurate cost estimates. Pricing Strategy Stewart’s quoted prices were usually higher than the calculated estimate about 65% of the time, and lower 15%
Words: 1060 - Pages: 5
small glass ornaments’ cost is more than twice higher than its selling price, which means the company is losing money. David Metz, the directory of Operations, analyzed the results and suggested to redo the calculations and to try allocating overhead to each product based upon direct materials and direct labor. Chen calculated the cost per box using Metz’ suggested approach and found that product costs are below current sales price. Yet, Chia-Yu was not fully convinced of this approach and realized
Words: 2201 - Pages: 9
