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Jivan's Javelins has just experienced an interesting quarter. It had budgeted sales of 2 , 0 0 0 javelins ( $ 4 0 0 ,
Jivan's Javelins has just experienced an interesting quarter. It had budgeted sales of javelins $ in revenues However, they ended up selling javelins, generating $ in revenues. Looking at just the sales numbers, Jivan feels that her company has performed well, but wants more insight.
She is confident that the variable manufacturing expenses were as planned, totaling about of the sales revenues. However, she feels that the selling and administrative expenses were over both on the variable and fixed side The variable budget for these items was $ per javelin sold, and the fixed budget was $ for the quarter. Jivan wants a quick report, along with a detailed discussion of the company's quarterly performance what was done well and what can be improved.
Also, Jivan is considering adding a premium product, called the BJavelin. It will retail for $ each and she expects sales a quarter. Jivan is wondering if this idea is a good one. She expects variable manufacturing expenses to be triple the dollar amount of the regular javelin, on a per unit basis. Similarly, the variable selling and administrative expenses will be double. Despite the small projected sales volume, Jivan will need to grow the firm's fixed costs to $ per quarter to add the B As a result, she is leaning towards not pursuing the premium product, but wants a second opinion.
As a budgetary analyst, please provide your insights and recommendations in a fourtofive paragraph memo to Jivan.
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