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PR 14.46 (Algo) Introducing a New Product (LO 14-4, 14-5) [The following information applies to the questions displayed below] Johnson and Gomez, Incorporated, is a

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PR 14.46 (Algo) Introducing a New Product (LO 14-4, 14-5) [The following information applies to the questions displayed below] Johnson and Gomez, Incorporated, is a small firm involved in the production and sale of electronic business products. The company is well known for its attention to quality and innovation. During the past 15 months, a new product has been under development that allows users improved access to e-mail and video images. Johnson and Gomez code named the product the Wireless Wizard and has been quietly designing two models: Basic and Enhanced. Development costs have amounted to $196,500 and $277,500, respectively. The total market demand for each model is expected to be 50,000 units, and management anticipates being able to obtain the following market shares: Basic, 20 percent, Enhanced, 15 percent. Forecasted data follow. -Computed on the basis of sales dollars Since the start of development work on the Wireless Wizard, advances in technology have altered the market somewhat, and management now believes that the company can introduce only one of the two models. Consultants confirmed this fact not too long ago, with Johnson and Gomez paying $35,500 for an in depth market study. Sales salaries (excluding commission) will be $90,500 no matter which product is sold. The marketing and advertising costs indicated for each product are incurred only if that product is sold. Other fixed overhead is expected to be the same, regardless of which product is introduced - Computed on the basis of sales dollars: Since the start of development work on the Wirehess Wizard, edvances in technology have altered the market somewhat, and management now believes that the company can introduce only cone of the two models. Consultants confirmed this foct not too long ago, whi Johnson and Gomez paying $35,500 for an in-depth market study Sales solaries (encluang commission) will be $90,500 no matter which product is sold. The marketing and advertsing costs indicated foc each product are incurred only if that product is sold. Other fwed overhedis expected to be the sare. regardless of which product is introduced PR 14-46 (Algo) Part 4: What other factors should Johnson and Gomez, Incorporated, consider? 4. What other factors should Johnson and Gomez, Incorporated, consider before a final decision is mode? Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect. Check my work is not available. (2) Possibility of mevger of the frm with a bigger player 2 Growth potential of the Bask and Enhanced modets (2) Combentive products in the maketplace 2 Aestretic differences between the two products 2 Breakeven poirts D Data validty Previous years' wales trends (2) Production feavibity 2 Eliects, ff ary, on enseng product wales

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