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in makin ctors should EBP consider before a final decision is g the product introduction decision? For determine which of the two models should be
in makin ctors should EBP consider before a final decision is g the product introduction decision? For determine which of the two models should be in Add a product line: manufacturer 939 Camilla's, a high-fashion dress manufacturer, is planning to m milla's supplies retailers primarily in the eastern states of Four metres of ma ning to market a new cocktail dress for the coming year o be usedess pattern. Some material that could be sold remains wrap and handbag. However terial after cutting. The left if the leftover material is used for the which will increase the cutting cost Austra are required to lay out the dress ma material could also be used to manufacture a matc over The company expects to sell 1 250 dresses. Market research reveals more care will be required in the cutting operation, that dress sales will be 20 per cent indicates that the wrap and higher if a matching wrap and handbaq are available. The market resear handbag will be saleable only as accessories with the dress. The combination o expected to be sold by retailers is as follows: arket Percentage of total Complete sets of dress, wrap and handbag Dress and wrap Dress and handbag Dress only Total 70% 100% The material used in the dresses costs $30 a metre, or $120 if the wrap and handbag are not manufactured is estimated at $48 a dress, and the le for each dress. The cost of cutting the dress ft-over material can be SS. Iif the wrap and handbag are manufactured, the cutting costs will increase by $21.60 e no saleable remnants. The selling prices and the costs to complete the three items per dress and there will b once they are cut are shown in the table below. Unit cost to complete (excludes costs of Selling price per unit $480.00 material and cuiting operation) S 192.00 46.80 Dress 66.00 Wi ra Handbag Required 1. Calculate Camilla's incremental profit or loss from manufacturing the wraps and handbags in conjunction 2. Identify any other issues that could influence Camilla's management in their decision to man with the dresses. Assume that Camilla's produces only sufficient product to meet sales demand ufacture wraps and handbags to match the dresses
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