Reference no: EM132903112
Montgomery Berdini is the Vice President of Business Development at a mid-sized cat food manufacturer on the outskirts of Etobicoke, Ontario. Recently, Montgomery has been contemplating branching out into dog food production as well. He brings the idea to his boss Murphy.
Montgomery argues: "I've done some research and if our marketing team is able to leverage all of their existing contacts, we could bring in up to $5,000,000 in the first year by branching out, which is really good considering the cost would only be $1,000,000. But even if they can't leverage ALL of their contacts, they should at least be able to bring in $400,000, which is still something we can build on.
Murphy replies: "That sounds promising. But the marketing team is pretty new and I will have to decide to either do nothing or take a chance on branching out. Thus, I need to know how likely the marketing team leveraging all their contacts has to be for us to make a profit.
Q: Follow Murphy's request and calculate how high the probability of the marketing team being able to leverage all of their existing contacts has to be to make branching out more profitable than keeping things the way they are.
Be sure to provide a sentence that answers the question, after you have done the math.
|
How much of costs should be inventoried under absorption
: How much of those costs should be inventoried under absorption (A) and variable (V) costing methods? Depreciation on machines P40,000
|
|
Networks contribute to business success
: Research, identify and briefly describe at least four ways that networks contribute to business success.
|
|
What is the unit production cost under variable costing
: Rose began the year with no inventory, produced 12,000, and sold 7,500 units. What is the unit production cost under variable costing?
|
|
Planning and managerial application
: As a manager, why is Profit-cost-volume important in planning? why is Profit-cost-volume important in planning?
|
|
Calculate high the probability of the marketing team
: Montgomery Berdini is the Vice President of Business Development at a mid-sized cat food manufacturer on the outskirts of Etobicoke, Ontario. Recently
|
|
Describes the net income under the absorption costing method
: Describes the net income under the absorption costing method? Carnation Company produced 10,000 units and sold 9,000 units.
|
|
Directly related to health of economy
: Economic history assures us that the health of the banking industry is directly related to the health of the economy.
|
|
What is the unit production cost under absorption costing
: Gumamela began the year with no inventory, produced 12,000, and sold 7,500 units. What is the unit production cost under absorption costing?
|
|
Explain reverse engineering of share prices
: Explain reverse engineering of share prices in conceptual terms. How does reverse engineering of share prices enable an analyst to infer
|