Management is considering taking a special order. The numbers have been crunched and it make sense to take the order at less than the standard selling price. What are some other considerations management should include in their analysis when determining if they will accept the special order?
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Q: Management is considering taking a special order. The numbers have been crunched and it make sense to take the order at less than the standard selling price. What are some other considerations management should include in their analysis when determining if they will accept the special order?
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- How do we decide whether to accept a special order? Which costs are relevant? What other factors should a manager consider? How does opportunity costs enter into the make or buy decision? What other factors should a manager consider to buy the product elsewhere? What is a constraint? Give an example? What other factors should a manager consider when taking into consideration a constraint? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.What is false about cost plus mark-up pricing? a. attempts to apply or allocate fix costs to pricing strategy b. not intuitive c. good example of value-based pricing d. vulnerable to bad sales estimates e. All are correct f. All are incorrect“Managers should always buy inventory in quantities that result in the lowest purchase cost per unit.” Do you agree? Why?
- Does your current/future company price discriminate? Explain how the practice works (direct or indirect) and estimate the profit consequences of price discrimination relative to charging a single, uniform price. If your current/future company doesn't price discriminate, are there opportunities to do so? How would you design the price discrimination?Based on your research of the market in the previous exercises, you have determined the market price for the items your department purchase is 15% below what you are being charged by department A of Marleys Manufacturing. How would you view this as a manager? What steps could you take to solve this discrepancy? What alternatives would you consider, assuming you had control over purchasing decisions?Explain the most important considerations when deciding whether or not to accept a special order at a selling price less than normal? Provide a practical example!
- a) Compare and contrast variable cost-plus pricing and target pricing, and indicate the circumstances in which each might be appropriate. b) Compute the selling price based on the compay’s pricing policy and indicate whether the customer’s maximum price is consistent with the company’s pricing policy. c) Assume that further tests have confirmed the product’s useful life, and that SA Berhad wishes to maximise profits by reducing costs. Indicate techniques which could be used to achieve a reduction in the product cost. d) Define Business Process Re-engineering (BPR).if we produce goods over the capacity, should we consider the fixed marketing cost and variable marketing cost when making the decision to accept or reject a special offer?Refer to the information for Smooth Move Company on the previous page. If SmoothMove accepts the order, no fixed manufacturing activities will be affected because there issufficient excess capacity.Required:1. What are the alternatives for Smooth Move?2. CONCEPTUAL CONNECTION Should Smooth Move accept the special order? By howmuch will profit increase or decrease if the order is accepted?3. CONCEPTUAL CONNECTION Briefly explain the significance of the statement in theexercise that “existing sales will not be affected” (by the special sale).
- You decide to increase advertising, you will not change the selling price and variable cost per unit do not change. In this scenario, your breakeven point in units will Group of answer choices: Increase decrease stay the same the answer cannot be determined from the given informationWhich of the following statements is not correct? Multiple Choice Price discrimination is the practice of selling identical goods or services to different customers at different prices. Peak-load pricing is the practice of setting prices highest when the quantity demanded for the product approaches the physical capacity to produce it. Price fixing is a particular legal and ethical problem because it is not universally illegal. Dumping is the practice of setting the selling price of a product at a low price with the intent of driving competitors out of the market or creating a barrier to entry for new competitors.Management is considering a one-time-only special order. There is sufficient idle capacity to fill the order without affecting any normal sales. Which one of the following is NOT relevant in making the decision? Sunk costs Variable costs Fixed costs Differential costs