Scenario 6

Media Wise sells a range of media products in package deals. The products sold within bundles are as follows.

	TV	Stand	Speaker
Selling Price ()	400	50	40
Variable Cost ()	250	30	25

Package A consists of a TV and a stand and is sold for a discounted price of 420. Package B consists of a TV, a stand and two speakers and is sold for a discounted price of 480. Currently packages are sold in a ratio of 2 Package As for every 3 Package Bs and 600 packages are sold each month. Fixed costs are expected to be 82,000 for the month.

Question 6

1. Write a memo to management which considers:
   1. Which is the best package sell and why
   2. Whether this selling package is realistic and why or why not?
   3. How else the profitability of the business could be improved