EXECUTIVE SUMMARY I recommend a full launch of the Bond-A-Matic 2000 (BAM) to facilitate IPG’s goals of increasing year-on-year sales of SuperBonder adhesives by 30.81% (from sales of $3.44M to $4.5M) and attaining a 35% market share amongst core industry groups within the CA market. Within the market for instant adhesives, Loctite’s target customer for SuperBonder will increasingly be a varied group of small- to mid-sized industrial manufacturers interested in quality control, cost-effectiveness
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CHAPTER 8: LOCATION STRATEGIES TRUE/FALSE 1. FedEx chose Memphis, Tennessee, for its central location, or "hub," primarily because of the incentives offered by the city of Memphis and the state of Tennessee. False (Global company profile, easy) 2. Generally, the objective of the location decision is to maximize the firm's profit. False (The strategic importance of location, easy) 3. When selecting a location, service organizations typically focus on maximizing revenue
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decision. Fixed costs are relevant in a decision of whether to offer a product or service at all, but are not relevant in deciding what to charge for the product or service once the decision to offer it has been made. Because price affects unit sales, total variable costs are affected by the pricing decision and therefore are relevant. A-4 The markup over variable cost depends on the price elasticity of demand. A product whose demand is elastic should have a lower markup over cost than a product whose
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CHAPTER 16 activity-based budgeting 1 questions for writing and discussion 1. The master budget has been criticized for the following reasons: it does not recognize the interdependencies among departments, it is static, and it is results, rather than process, oriented. These criticisms are especially apparent when companies are in a competitive, dynamic environment. When the environment changes slowly, if at all, the master budget would do a good job of both planning and control. 2
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❏ BEP Analysis n = number of units/volume B = Breakeven volume TC = Total cost P = Unit (selling) price FC = Fixed cost VC = Variable cost; TFC = Total Fixed Cost TVC = Variable Cost/Unit Revenue/period = n P TC/period = n VC + FC Profit/Loss = Revenue - TC = n P - (n VC + FC) = n (P - VC) - FC At BEP, Profit = 0 ==> 0 = n (P - VC) - FC or n = FC P - VCChapter 5: Revenue and Cost Analysis 10/19/98 6 ❍ P - VC is called contribution margin (CM), ❖ The difference between selling price
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.52 Total Unit Cost = Unit cost + Freight Cost 30.85 + .52 = $31.87 2. HLA Quote: • Unit price = $19.50 • Shipping lead time = 8 weeks • Tooling = $3,000 The per unit cost (based on an annual supply) Yearly Unit Cost= (annual demand *( unit cost + packaging cost )) + Tooling charge (60000 *(19.50 + 0.00)) + 3000 = $1,173,000 Total Unit Cost = 1173000/60000 = $19.55 Monthly Freight Cost = $41,366 Unit Freight Cost = 41,366/5000 = 8.28 Total Unit Cost
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market does not like working under a monopoly, and especially as Western Ltd do not give volume discounts. (d) The number of buying points is estimated at 20,000, of which 220 in Birmingham, 150 in London, and 70 in Manchester, take 55% of the total. [pic] Figure 1: compressed air filter unit Filtereinsatz = Filterkern = core (e) There are 35 manufacturers of equipment powered by compressed air, who dominate
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Lecture 2 (1)Costs Terms, Concepts and Classifications (2) Cost Behavior – Analysis and Use Costs Terms, Concepts and Classifications Manufacturing Costs Direct Materials Direct Labor Manufacturing Overhead The Product Direct Materials Raw materials that become an integral part of the product and that can be conveniently traced directly to it. Example: A radio installed in an automobile Direct Labor Those labor costs that can be easily traced to individual units of product
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alcoholic beverages such as Japanese whisky but has expanded into everything from sandwiches to soft drinks. In January, 2014, Suntory made an agreement with American producers Jim Beam Inc. to buy their company for $13.6 billion dollars. Suntory’s total annual revenue is $4.3 billion dollars and once this acquisition goes through, it will make Suntory the world’s third largest maker of spirits. The alcohol market is an enormous market. In the following two paragraphs Team C will provide an overview
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four months. The minimum time the machine can be hired for is four months. (v) The company requires a profit mark up of 10% on this job Required: (a) Prepare an Operating Statement for the job, using the above information, showing clearly Total Cost, Profit and Selling Price. Outcome 2 A large and important customer, Neilanplc, has approached BissettLtd and offered Bissett Ltd £4,700 per unit to buy 50 extra units of product XYZ. The management of Bissett Ltd is considering
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