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Sunday, July 14, 2013

Contribution Margin and Breakeven Analysis

Aunt Connies Cookies is a brand that is alike with delicious dirty dog crème and significant deal cookies crystaliseim the east and mid-west. Maria Villanueva, the great-niece of Connie Rochoa, is now the CEO of the family-owned business. She has establish Team C as the COO. Team C go forth make decisions with a fare to maximize the firms comp angiotensin converting enzyment digress edge and operate profits. Aunt Connies Cookies was approached to awake a spate hostelry of 1 million packs of original big money cookies to be completed in one months time. The caller-up compulsory to square off if end this sound out depart be a bully option. Maria stated that the entirety section bank and operating profit from the dirty dog créme cookies are slight than the objective mint cookies. She suggested that we reduce the menstruation yield spate for lemon créme and farm more than real mint to retain the bulk order. In pass judgment the bulk order, Marias occult information should not be followed. To maximize the operating product, it is remediate to produce more of the lemon créme cookies because it has a great contribution edge per unit than the real mint. This specifyt that the current doing of real mint cookies should be reduced. The bulk order should not be witnessed when the cookie production for both types of cookies exceeds production capacity.
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This would mean that the company is incapable of completing the order. Also, Aunt Cookies should not consider accepting a bulk order if the asking sales value per unit for the order is at a charge that would produce results where the contribution margin is less than the fixed costs. Although the contribution margin may cool it be greater than zero, it go away still produce a loss for the company. Therefore, it would not be cost it to the company to touch the order. If you want to get a adequate essay, order it on our website: Ordercustompaper.com

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