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¶ … Profit (CVP) analysis is noted by Cafferky and Wentworth (2010) to be an important decision making tool for managers. CVP helps managers in understanding the connection between the cost and volume with organizational profits in mind.In our previous exercise, we contemplated going back in time and then coming up with the best choices regarding the manufacture of the three handheld devices- X5, X6 and X7. In this study, we use CVP analysis in guiding our decisions on the manufacture of the three product ranges.As Harngren, Datar and Foster (2006) noted, CVP analysis is important in the formulation of product strategy and policy. Our reliance of CVP analysis is based on the fact that it can help in the making of the right choices on our 3 product ranges since the year 2006.This is done without the need for concentrating on the beginning and end of each and every year's product performance levels.CVP as a decision making tool can be used in various ways. It can for instance be used in calculating...
Joe Schmoe. Our strategy is therefore geared towards the building of a better strategy that can increase the bottom line. Our profit projection should be far much greater than the $954,830,241 which the corporation made between 2006 and 2009 under Mr. Joe Schmoe's leadership. Our strategy is aimed at helping the corporation bag over 100M in profits. This fete should be realized by following the profit distribution strategy over a four-year period as shown in the diagram below. This profit distributin strategy was arrived at after an in-depth examination of the profit that the firm made under Mr. Joe's leadership (In Time Wrap 1 and 2). A review of the outcomes of Time Wrap 1 indicates that X7 as a product requires a lot of efforts in the coming years since it is the…
References
Cafferky, M and Wentworth, J (2010.Break Even Analysis. Business Expert Press, 2010
Horngren, CT., Datar, SM., Foster, GM (2006).Cost accounting: A Managerial Emphasis, Twelfth Edition, Pearson Education, Inc.
The above table indicates that the sales volume which is required in order to achieve a $100 M. profit at a price of $245 with an R&D investment of 30% is 1,676,190 units. This is calculated by dividing the total revenue accrued by the unit price. X6: The product X6 has been in the market for a total of 2 years. Unlike the product x5, the customers take great consideration of the
X7 is also very sensitive to the price, thus when its price is cut down, the price would automatically raise the figures of product's unit sales. Therefore there is a requirement for the price to be lowered so that the unit sales figure to be raised. The product price and the profit which is being targeted into CVP are put under R&D to sum up the total sales capacity
Module SLPIntroductionThis paper analyses Clipboard Tablet (CT) performance, and provides a revised strategy for the four-year plan that was initially developed. Notably, the analysis will be based on Cost-Volume-Profit (CVP). The revised strategy takes into account prices, research and development allocation percentage, together with any rational product discontinuations for the X5, X6, and X& tablets for each of the years ranging from 2012 to 2015. The analysis considers the break-even
simulation, a very powerful computer-based technique has rapidly gained acceptance as a decision-making tool in business as well as industry (Wynn et al.,2007). The main uses of simulation in business processes are the improvement of operating as well as operational efficiency (Watkins & Hill,2009). The basic idea of the concept of simulation is to accurately model a given physical process on the computer screen by incorporating the various uncertainties