Rontell, Inc., is a medium- sized producer of latex balloons that are filled by helium and given on special occasions. It distributes it s balloons in many styles and colors to the tri- state region surrounding Chicago, Ill. Martha Rontell, owner of Rontell, Inc., is trying to understand what type of balloons sells best so she can invest more artist time crafting unique balloons in that category. Always customer-oriented, Martha will test the new designs with a customer panel before beginning product ion. That said, she needs to make sure the effort is going to the best - selling products as creating new art and testing it seectiveness with customers is costly. The following table lists the sales over the past four years for the different types of balloons.

REQUIRED:

a. Calculate the actual amount of change between years, starting with 20x6 and working backward. Do this for each type of balloon.

b. Based on these results and the overall sales patterns, where would you recommend Martha put her time, artist effort, and money?

c. Now calculate the percentage change in each of the categories. Once again, start with 20x6 and work your way back year by year. Remember, when you move from 20x6 to 20x5 as your basis year, you must change your denominator to the 20x5 value. Be careful here!

d. Recalculate the percentage change, now using 20x6 as the basis year across all of the categories and calculations of change. You will still calculate the difference from one year to the next, but, this time, always use 20x6 as your basis year.

e. Finally, do one calculation for each category. Specifically, subtract the 20x3 value from the 20x6 value and then divide by the 20x6 value. What does this information tell you?

f. Out of all of the numbers you have calculated, which do you feel is most useful to making the decision facing Martha? Why?

g. Looking at all of your calculations, draft a simple one- to two- paragraph memo to Martha with your suggestions for where she would get the most benefit from enhancing a specific product line.

Transcribed Image Text:

Balloon Type 20x6 Sales 20x5 Sales 20x4 Sales 20x3 Sales Happy Birthday 1,525,500 1,377,250 1,250,750 1,200,600 Welcome Home 950,300 980,200 995,500 998,750