ipl-logo

Alice Inc Case Study Solution

1145 Words5 Pages

Based on our calculations in Appendix 1. at the first stage support costs were allocated to two existing departments, i.e. Machining and Assembly, based on direct labor hours. Therefore total amount of costs assigned to Machining department is $472.000,00 and to Assembly department is $248.000,00. At the second stage total costs from both departments were distributed to products (Regular and Deluxe). Referring to our calculations in Appendix 1. you may find that total amount of costs assigned to Regular model is $765.857,14 and $771.142,86 to Deluxe model. After final computations you can see that the cost of one unit of Regular model is $2,55 and cost of one unit of Deluxe model is $3,87. b) Determine the product costs and profits per …show more content…

What insight is provided by the new profitability analysis? What should Alice, Inc. do to enhance its profitability? What options may be available? Analyze the profitability of the two products As you can see in Appendix 1 our analysis revealed that according to new cost accounting system the profitability of Regular model is about 90% whereas profits from selling Deluxe model is about 10%. In the meantime production costs of Regular model is about 45% and Deluxe model is 55%. Thus we may conclude that for Alice, Inc. it is not profitable to produce Deluxe model comparing to Regular model, as costs for production of Deluxe model are higher but the profit is lower. What insight is provided by the new profitability analysis? What should Alice, Inc. do to enhance its profitability? In order to increase profitability we would advise Alice, Inc. to focus more on production and realization of Regular model faucets, i.e. spend more direct and indirect expenses on Regular model. What options may be available? Alice, Inc. may devote greater part of manufacturing support costs as well as direct costs on production of Regular model and decrease production of Deluxe

Show More
Related

  • Valley Scholars Program: Budget Narrative

    985 Words  | 4 Pages

    Valley Scholars Program Budget Narrative Attached in the excel document is the budget for the James Madison University Valley Scholars program (VS). Since the grants the program is applying for are general funding grants, this budget reflects the overall cost of the program for an entire year. That being said, some interesting pieces in the budget because of the program’s situation as part of James Madison University, the expansion of the program, and young age of the program. In many ways this budget is preliminary. When the program was designed, there was a general thought to how much the program would cost, but in its second year, the costs are more descriptive of future costs.

    Read More

  • Causal Togs: A Case Analysis Of The Casual Tog Company

    1746 Words  | 7 Pages

    The present-day business environment is characterized by increasing competitiveness in different industries. The owner Cy is aware of the increasing competition. The company has leased new production plants in seven southern states and one in Arkansas. This investment has put extra pressure on the company to generate revenue and stay in the competition of the market. Economic factors play a crucial role in any investment decisions that are made for taking a gain and better return to the investor.

    Read More

  • Btec Business Level 3 Unit 9 P4 Business

    1383 Words  | 6 Pages

    P5 In this task am going to explain the reason behind the choice of media and objective of the media in business and the method that I use to promote my product, media this this is the mass communication such as social media, television, radio, printed media such as magazines, newspaper and etc. this helps us to promote our business by saving time and sometimes money such social media this helps us to save money which helps us to save our cost in other business act Objectives of media To create awareness It brings awareness about the upcoming products or services, its provide information about the product how it used, theprice of the product, the place where the customers can get the product, if there any effect when using it wrongly, so this

    Read More

  • Case Study Cool Moose

    1318 Words  | 6 Pages

    Cool Moose Creamery Incremental Income Statement New Triple Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Sales $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 Cost of Goods Sold 1336 1336 1336 1336 1336 1336 1336 Gross Margin 8,664 8,664 8,664 8,664 8,664 8,664 8,664 Depreciation 285.71 1,714.29 1,714.29 1,714.29 1,714.29 1,714.29 1,714.29 Refrigerator Expense 150 Delivery expense 150 Installation Expense 650 Utilities 350 350 350 350 350 350 350 Wages 2,239.95 2,109.15 2,109.15 2,109.15 2,109.15 2,109.15 2,109.15 Interest Expense 594 662.5705 504.3456 334.6827 152.7547 8.241626 0 Opportunity Cost 2,415 2,415 2,415 2,415 2,415 2,415 2415 Total Expense 7,834.98 7,251.01 7,092.78 6,923.12 6,741.19 6,596.68 6,588.44 Net Income $829.02 $1,412.99 $1,571.22 $1,740.88 $1,922.81 $2,067.32 $2,075.56 Disadvantages: a) Customers will reduce buy scooped ice

    Read More

  • Budget Narrative

    1227 Words  | 5 Pages

    Budget Narrative Personnel The founder of the organization, Melody Raftis who will devote 100 percent of her time, planning, implementing, evaluating as well as orchestrate activities for the organization will receive an annual salary of $40,000. She will also be in charge of focus group discussions and will assist all participants with encouragement when the focus group is not in session. Melody will also recruit volunteers such as physicians, as well as nurses to help implement the program. Melody will also make routine visits to physician’s offices as well as community programs to help recruit eligible participants who would benefit from the program.

    Read More

  • Peyton Approved Case Study

    492 Words  | 2 Pages

    In the income statement can be show the sales revenue of the company to be of $ 60,221.40. In order to obtain current ratio, we divide current assets by current liabilities (62,022.40/7,630.00= 8.13). Our company believe that one of the biggest strength is the demand of hypoallergic items. The weakness of Peyton Approved is that the profit margin is 99.73%. Analysis and

    Read More

  • Bimba Executive Summary

    411 Words  | 2 Pages

    Expendable tooling for the current month is $15.4k or 2.7% of sales down 2.2% from July 2014. Year over year expendable tooling is down from $231.9k or 3.5% of sales in FY2014 to $210.4k or 3.0% of sales in

    Read More

  • Roundtech Case Study Summary

    428 Words  | 2 Pages

    The production department is paid on a piece rate system, for every unit the send to the next station they are compensated. The production staff that sort and store raw materials are paid per box is unpacked and those who pack finished goods are paid per box packed ready for shipment. The piece rate compensation plan motivates the employees to produce more nuts and bolts. The piece rate system also has unintended

    Read More

  • Cma Case Analysis Essay

    318 Words  | 2 Pages

    Because the Kendrick’s estimated cost for the job was $714 per hour, it can expect $17,850 cost saving for the job with a set of CMI’s pads. If we reflect this economic value to previous $3,000, the Kendrick’s total WTP would be $20,850 per set, and $3,475 per pad. After considering the profit margin for distributors (40%), we can charge $2,482 per pad as a maximum price. However, Sanwal felt the 33% faster speed and 20 times longer life are unusual results, and he believed that the 20% faster speed and 10 times longer life would be more reasonable. When I reflect these conservative conditions, CMI’s can charge $1,595 per pad as a maximum price.

    Read More

  • Go Ask Alice Analysis

    764 Words  | 4 Pages

    Go Ask Alice Response Go Ask Alice is a bestseller about a 15-year-old girl who went to another city after she developed a drug habit. This book is based on the actual diary of a young drug user. In this book, the diarist, who we do not know the name of, was served a glass of cola at a party which contained LSD.

    Read More

  • Break Even Analysis Examples

    1077 Words  | 5 Pages

    If complete data on cost structure of a product is not available than there is no benefit of doing this analysis as it would yield incorrect result.   APPLICATION OF BREAK_EVEN ANALYSIS Break-even point (unit) = (Total fixed cost)/(price-variable cost per unit) = 1,220,000/(650-345) =4000units Break-even point (value) = (Total fixed cost)/(Price-vaariable cost per unit )×price per unit = (1,220,000 ) /(650-345)×650 =$2600000 Margin of safety (value) =

    Read More

  • Crown Cork And Seal Case Analysis

    1154 Words  | 5 Pages

    1. Case: Crown, Cork and Seal in 1989 (a) Perform an industry analysis of the U.S metal can industry in 1989.Define the industry. Analyze the effect of buyer and supplier power, competition, barriers to entry, complements and substitute for the industry. Summarize your assessment of industry’s attractiveness. Is this an industry in which the average metal company can expect an attractive return over the long run?

    Read More

  • Pro Forma Statement Analysis Paper

    877 Words  | 4 Pages

    Introduction Financial statements are a formal record or report of how a company is progressing. The activities of a company can define how it will proceed in the present and the future and is critical for the leadership of the company to understand these reports. This report helps determines the ability of how a company can generate the cash that is needed to operate and function, while showing how a business can pay back its debt. Financial statements provide a way for a company to track the results and show any issues and they can put a focus and attention on business transactions. Pro forma statements are typically used to determine the issues that might happen.

    Read More

  • Kerrie's Case Study: Managing An Organization

    988 Words  | 4 Pages

    Student Answer: Kerrie Peterson is a general manager of a large business division in a company that deals with financial services. She has a record of accomplishment of growing the business expressible but she now has the challenge of leading an unpopular change, a cost reduction initiative. Kerrie knew the cost reduction effort was going to be a test of her leadership ability (Lester & Parnell, 2006) In the first part of Kerrie’s case, she decides to use a team-player approach in development and selection of strategies to hit a 15 percent cost reduction goal (Lester & Parnell, 2006).

    Read More

  • External Analysis: Effective Decision Making

    444 Words  | 2 Pages

    Many lessons can be learned from the external analysis! First, the most important take away is that you must know your own business, and know it well. Knowing the details of your business allows for pointed questions to be asked that will guide research in the appropriate direction. It will not serve me well to ask and research the wrong questions. Effective decision making is the distinguishing factor that determines success, and decisions that are based on research rather than intuition have a higher probability of accomplishment (Nassar, 2007).

    Read More

More about Alice Inc Case Study Solution

Open Document