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Transcript of BW Manufacturing
They are examining 4 different options for production in their company.
They believe they have made the best decision for the company.
Let's take a look at their options! Should BW Manufacturing Co. Drop Grill A? If BW Co. drops production of Grill A, the ending results will be:
• A $7,520,000 decrease in Gross Margin
• An Operating Income of $-570,000
Fixed Costs will occur whether or not the company produces any product. Therefore the company should continue to produce Grill A o cover costs. Should BW Manufacturing Co. Lower the Price? Revenues Increase by $500,000
Total Costs Increase by $320,000 Should BW Manufacturing Co. Drop Grill A? Should BW Manufacturing Co. Lower the Price? Cassandra Beasley
Matthew Griesbach Should BW Shift its Advertising
focus from Grill A to Grill C? Should BW lower the price of Grill C and change its advertising focus? There is an increase in Income Before Tax by $180,000.
This option would be beneficial to BW Manufacturing Option 2:
BW lowers the Price to $75 and by doing so expects to sell 20,000 more units BW Manufacturing chose to go with option number 2, which is the best decision for their company.
While all other options decreased revenue, this option increased it by $180,000.