How might change influence their company

Reference no: EM1375479

"Easton Corporation makes two diverse boat anchors - a traditional fishing anchor and a high-end yacht anchor - using the similar production machinery. The contribution margin of the yacht anchor is 3 times as high as that of the other product. The company is presently operating at full capacity and has been doing so for nearly two years. Bjorn Borg, the company's CEO, want to cut back on production of the fishing anchor so that the company will make more yacht anchors. He says that this is a "no-brainer" because the contribution margin of yacht anchor is so much higher."

(Weygandt, Kimmel, & Kieso, 2012).

Prepare a page memo to Bjorn Borg explain the analysis that the company should perform. Be sure to address the subsequent in your analysis:
• what role might contribution margin for each unit of limited resource play in this decision?
• Should marketing department be involved in decision-making process? How important is consumer demand?
• Should the company think expanding their production facilities or purchasing additional equipment?
• How might this change influence their company brand or the customer's perception of their brand? Will they be appealing to a different market by offering yacht anchors?

Reference no: EM1375479

Questions Cloud

What are some processes as well as techniques : What are some processes as well as techniques that you would suggest to make the budgeting process work well? Start with more general however also provide some specifics as related to creating detailed project budgets

Calculating effective rate of protection : Assume that the country A has only three categories of traded goods and that A's imports and exports of the three goods are as follows:

Complete the worksheet : Using information, complete the worksheet on the subsequent page for Mann's Copy Shop for the month of September you have to prepare for the month ending 30 th September, 2008:

Under the sales articles of the ucc when a agreement : Under the Sales Articles of the UCC when a agreement for the sale of goods stipulates that the seller ship the goods by common carrier FOB

How might change influence their company : How might this change influence their company brand or the customer's perception of their brand? Will they be appealing to a different market by offering yacht anchors?

Calculate the autarky price ratios : The only win condition for H is to manufacture and no production by Company F. If Company F is going to manufacture, they will have a win-win situation with company H having losses

Cusic industries had the subsequent operating results : Cusic Industries had the subsequent operating results for 2010, sales = $15,300 cost of goods sold = $10,900 depreciation expense = $2,100 interest expense = $520 dividends paid = $500

Overall completion percentage for wip : Find what is the overall completion percentage for WIP as to direct materials at end of the period?

Using an infrastructure as a service provider can allow : Using an Infrastructure as a Service provider can allow an organization to avoid major capital investments for network equipment and computer servers and storage

User Account

All Pages