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need some help evaluating the financial #s. this would help me get started on the proposal. my course study uses the formula: eliminate if: avoidable
need some help evaluating the financial #s. this would help me get started on the proposal. my course study uses the formula: eliminate if: avoidable costs are greater than or equal to the lost contribution margin. Recommendation to Drop the Mat Product Line: riubber Co. has been analyzing its Gym Mat product line. The sales group for the Company's Pool line has suggested that the Mat line be discontinued in order to enhance the focus on Pools and Balls. The finance department provided information on certain staff that would be duplicative, if the Mat line is discontinued. Salary and benefits of $75,000 could be avoided. The sales group for the Mat line indicates that 15% of Ball sales come as a result of Mat orders, but Pool production and sales would likely increase 6%. The company's realtor indicates that some of the warehouse could also be leased out for $300,000. She indicates that there is a 55% likelihood of being able to find a tenant. Evaluate the proposal to drop the Mat line. Sales Revenue from the original 2017 Case Study notes: Pools - $5,500,000 sales revenue ($50,000 @ $110/pool) Balls - $3,600,000 sales revenue (180,000 @ $20/ball) Mats - $4,125,000 sales revenue (75,000 @55/mat) T Recommendation to Drop the Mat Product Line: riubber Co. has been analyzing its Gym Mat product line. The sales group for the Company's Pool line has suggested that the Mat line be discontinued in order to enhance the focus on Pools and Balls. The finance department provided information on certain staff that would be duplicative, if the Mat line is discontinued. Salary and benefits of $75,000 could be avoided. The sales group for the Mat line indicates that 15% of Ball sales come as a result of Mat orders, but Pool production and sales would likely increase 6%. The company's realtor indicates that some of the warehouse could also be leased out for $300,000. She indicates that there is a 55% likelihood of being able to find a tenant. Evaluate the proposal to drop the Mat line. Sales Revenue from the original 2017 Case Study notes: Pools - $5,500,000 sales revenue ($50,000 @ $110/pool) Balls - $3,600,000 sales revenue (180,000 @ $20/ball) Mats - $4,125,000 sales revenue (75,000 @55/mat) T
my course study uses the formula: eliminate if: avoidable costs are greater than or equal to the lost contribution margin.
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