Question Details

(solution) Managerial Analysis BYP 9-2 Prasad & Green Inc. manufactures


Managerial Analysis

BYP 9-2 Prasad & Green Inc. manufactures ergonomic devices for computer

users.

Some of their more popular products include glare screens (for computer

monitors), keyboard

stands with wrist rests, and carousels that allow easy access to

magnetic disks. Over

the past 5 years, they experienced rapid growth, with sales of all

products increasing 20%

to 50% each year.

Last year, some of the primary manufacturers of computers began

introducing new

products with some of the ergonomic designs, such as glare screens and

wrist rests, already

built in. As a result, sales of Prasad & Green's accessory devices have

declined somewhat.

The company believes that the disk carousels will probably continue to

show growth, but

that the other products will probably continue to decline. When the next

year's budget was

prepared, increases were built in to research and development so that

replacement products

could be developed or the company could expand into some other product

line. Some

product lines being considered are general-purpose ergonomic devices

including back supports,

foot rests, and sloped writing pads.

The most recent results have shown that sales decreased more than was

expected for

the glare screens. As a result, the company may have a shortage of

funds. Top management

has therefore asked that all expenses be reduced 10% to compensate for

these reduced

sales. Summary budget information is as follows.

Budgetary Planning

Direct materials $240,000

Direct labor 110,000

Insurance 50,000

Depreciation 90,000

Machine repairs 30,000

Sales salaries 50,000

Office salaries 80,000

Factory salaries (indirect labor) 50,000

Total $700,000

Instructions

Using the information above, answer the following questions.

(a) What are the implications of reducing each of the costs? For

example, if the company

reduces direct materials costs, it may have to do so by purchasing

lower-quality

materials. This may affect sales in the long run.

(b) Based on your analysis in (a), what do you think is the best way to

obtain the $70,000

in cost savings requested? Be specific. Are there any costs that cannot

or should not

be reduced? Why?

 


Solution details:

Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .
SiteLock

About this Question

STATUS

Answered

QUALITY

Approved

DATE ANSWERED

Sep 13, 2020

EXPERT

Tutor

ANSWER RATING

GET INSTANT HELP/h4>

We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.

You can also use these solutions:

  • As a reference for in-depth understanding of the subject.
  • As a source of ideas / reasoning for your own research (if properly referenced)
  • For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student.

NEW ASSIGNMENT HELP?

Order New Solution. Quick Turnaround

Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN A DEADLINE.

Order Now