Bw Manufacturing Essay

CASE SUMMARYThe owners of BW Manufacturing, a small manufacturer of gas grills, have prepargond a preliminary figure for the upcoming year and would like to assess the m matchlesstary encounter of several alternative scenarios, including dropping a produce changing the price on a product, with a resulting diverseness magnitude in playscript and shifting advertising focus, with a resulting shift in quite a little from one product to another. A new budget must be prepared. At year-end, the actual results are meliorate than had been planned, but not necessarily better than what should have been, given actual sales volumes.TEACHING OBJECTIVESThis short causa addresses the topic of contribution analysis as an easy way to lose it gather-planning issues such as adding or dropping a product or ser unrighteousness changing a price adding or decreasing expect volumes or preparing a profit budget. In this situation there are three products, each with different proportions of variab le and fixed costs. The product with the highest profit per unit on a full cost basis has the lowest contribution per unit on a variable cost basis, and vice versa.Four different marketing plans are proposed before one is in conclusion adopted as the plan for the year. At year-end the actual results burn be compared with the budget and with a flex or adjusted budget based on the actual product volumes realized. The numbers are mere(a) and the students can readily see the benefit of variable costing.2. Calculate the dissemble of reducing the Grill C price to $75, with the expectation that the volume of that product will step-up to 220,000 units. Assume no other changes to the plan. 3. Calculate the carry on of a 10,000-unit decrease in Grill A and a 10,000-unit increase in Grill C volume due to a change in advertising focus. Assume no other changes to the plan. 4. Calculate the impact of a $5 decrease in Grill Cs price and a change in advertising focus, leading to a 10,000-uni t decrease in Grill A volume and a 30,000-unit increase in Grill C volume. Assume no other changes to the plan. 5. ca-ca a revised 2009 profit budget assuming the owners chose Option 2lowering the price of Grill C to $75 and expecting sales volume of that grill to increase to 220,000 units. 6. The actual results for 2009 are shown below. Was 2009 net income more or less than what should have been expected given these actual volumes and prices? If the results were different, why?