Bw Manufacturing Essay

CASE SUMMARYThe owners of BW Manufacturing, a small manufacturer of gas grills, have prep atomic number 18d a preliminary reckon for the upcoming year and would like to assess the fiscal carry on of several alternative scenarios, including dropping a production ever-changing the price on a product, with a resulting development in hatful and shifting advertising focus, with a resulting shift in mess from peerless product to another. A new budget must be prepared. At year-end, the actual results are best than had been planned, but not necessarily better than what should have been, given actual sales volumes.TEACHING OBJECTIVESThis short suit of clothes addresses the topic of contribution analysis as an easy way to try out clear-planning issues such as adding or dropping a product or ser wickedness changing a price adding or decreasing pass judgment volumes or preparing a profit budget. In this situation there are three products, each with different proportions of variable a nd fixed costs. The product with the highest profit per unit on a full cost basis has the last contribution per unit on a variable cost basis, and vice versa.Four different marketing plans are proposed before one is at last adopted as the plan for the year. At year-end the actual results abide be compared with the budget and with a flex or adjusted budget based on the actual product volumes realized. The numbers are childly and the students can readily see the benefit of variable costing.2. Calculate the refer of reducing the Grill C price to $75, with the expectation that the volume of that product will plus to 220,000 units. Assume no other modifys to the plan. 3. Calculate the shock 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-unit decrease in Grill A volume and a 30,000-unit increase in Grill C volume. Assume no other changes to the plan. 5. work up 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?