- How much of the fixed costs were allocated between the Standard and Deluxe Boxes based on the Lumpsum Analysis Method? Is the CEO correct that the Deluxe Box is not contributing much to company operating profit? Please elaborate on your answer and include evidence from Tab 1 of the Excel workbook.
Based on the Lumpsum Analysis Method, the standard boxes and the Deluxe box have a total fixed cost of $156 million. A fixed cost of $ 120,000.00 (Million) was allocated for the production of standard boxes, and a cost of $36,000.00 (Million) was reserve for the production of deluxe boxes.
The CEO’s assumption that the Deluxe box has little impact on the company’s operating profit is incorrect. The operating profit is a company’s total earnings before taxes and short-term responsibilities. According to Lumpsum, Deluxe boxes contribute 63% of the company’s operating profit, while standard boxes contribute 41%. The company earns 63 cents on every dollar spent on deluxe boxes, accounting for 63% of the operating profit.
- The intern suggested splitting the costs, as you have done in the calculations performed in Tab 2, based on sales volumes. Explain the impact of calculation performed in Tab 2. In your discussions, please elaborate on why the answer has changed from the calculations you performed in Tab 1. Also indicate the benefit of accurate costing when trying to improve operating profit margins.
[insert your answer here]
- Based on the calculations in Tab 3 using ABC, comment on the operating profits made for each product. Explain in your report why operating profits have changed under ABC analysis. Also indicate which of the systems â that is the traditional systems (using lumpsum or volume-based cost allocation in Tab 1 and Tab 2) or the ABC systems, (Tab 3) provide the best answers for decision making to improve cost management in order to improve operating profit.
[insert your answer here]
4.The sustainability manger is concerned about the Anti-Deluxe Action groupâs impact on the company and suggested that materials and process of making the Deluxe Boxes should be changed. As the process of making the Sustainable Deluxe Boxes, will be less intensive, a suggestion is made that the selling price for the Sustainable Deluxe Boxes could be $23 per unit. Discuss whether changing the price to $23 is a viable option for LGI? Provide evidence from the Excel workbook, Tab 4.
[insert your answer here]
- If Largo Global Inc. decides to sell the Sustainable Deluxe Boxes at the price the CEO demands to maintain the same profit percentage as for Standard Boxes do you think the new price calculated in Tab 4 is a viable option? Why is it important for LGI to know what their Breakeven quantity is? Also indicate which other (non-numerical information) should be considered when deciding to pursue the Sustainable Deluxe Box option.
Sample Solution
since they have accomplished something out of line. Different variables should be thought of, for instance, Proportionality. Thirdly, Vittola contends that war ought to be stayed away from (Begby et al (2006b), Page 332) and that we ought to continue conditions strategically. This is upheld by the “final retreat” position in Frowe, where war ought not be allowed except if all actions to look for discretion comes up short (Frowe (2011), Page 62). This implies war ought not be proclaimed until one party must choose the option to pronounce battle, to safeguard its domain and freedoms, the point of war. Notwithstanding, we can likewise contend that the conflict can never be the final retreat, considering there is dependably a method for attempting to stay away from it, similar to assents or settlement, showing Vittola’s hypothesis is imperfect. Fourthly, Vittola inquiries upon whose authority can request a formal statement of war, where he infers any district can do battle, yet more critically, “the sovereign” where he has “the regular request” as indicated by Augustine, and all authority is given to him. This is additionally upheld by Aristotle’s Governmental issues ((1996), Page 28): ‘a ruler is the regular unrivaled of his subjects.’ Notwithstanding, he really does later stress to place all confidence in the sovereign is off-base and has results; a careful assessment of the reason for war is expected alongside the eagerness to arrange rival party (Begby et al (2006b), Page 312& 318). This is upheld by the activities of Hitler are considered treacherously. Additionally, in this day and age, wars are not generally battled simply by states yet additionally non-state entertainers like Al-Queda and ISIS, showing Vittola’s regularizing guarantee on power is obsolete. This is additionally upheld by Frowe’s case that the pioneer needs to address individuals’ inclinations, under real power, which joins on to the fourth condition: Public statement of war. Concurred with many, there should be an authority declaration on a formal statement of war (Frowe (2011), Page 59-60&63). At long last, the most questionable condition is that wars ought to have a sensible likelihood of coming out on top. As Vittola emphasized, the point of war is to lay out harmony and security; getting the public great. In the event that this can’t be accomplished, Frowe contends it would be smarter to give up to the adversary. This can be legitimate on the grounds that the expenses of war would have been greater (Frowe (2011), Page 56-7). Thusly, jus promotion bellum involves a few circumstances yet in particular: worthwhile motivation and proportionality. This gives individuals an aide regardless of whether entering a war is legitimate. Nonetheless, this is just a single piece of the hypothesis of the simply war. In any case, it tends to be seen over that jus promotion bellum can be bantered all through, showing that there is no conclusive hypothesis of a simply battle, as it is normatively conjectured.>
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since they have accomplished something out of line. Different variables should be thought of, for instance, Proportionality. Thirdly, Vittola contends that war ought to be stayed away from (Begby et al (2006b), Page 332) and that we ought to continue conditions strategically. This is upheld by the “final retreat” position in Frowe, where war ought not be allowed except if all actions to look for discretion comes up short (Frowe (2011), Page 62). This implies war ought not be proclaimed until one party must choose the option to pronounce battle, to safeguard its domain and freedoms, the point of war. Notwithstanding, we can likewise contend that the conflict can never be the final retreat, considering there is dependably a method for attempting to stay away from it, similar to assents or settlement, showing Vittola’s hypothesis is imperfect. Fourthly, Vittola inquiries upon whose authority can request a formal statement of war, where he infers any district can do battle, yet more critically, “the sovereign” where he has “the regular request” as indicated by Augustine, and all authority is given to him. This is additionally upheld by Aristotle’s Governmental issues ((1996), Page 28): ‘a ruler is the regular unrivaled of his subjects.’ Notwithstanding, he really does later stress to place all confidence in the sovereign is off-base and has results; a careful assessment of the reason for war is expected alongside the eagerness to arrange rival party (Begby et al (2006b), Page 312& 318). This is upheld by the activities of Hitler are considered treacherously. Additionally, in this day and age, wars are not generally battled simply by states yet additionally non-state entertainers like Al-Queda and ISIS, showing Vittola’s regularizing guarantee on power is obsolete. This is additionally upheld by Frowe’s case that the pioneer needs to address individuals’ inclinations, under real power, which joins on to the fourth condition: Public statement of war. Concurred with many, there should be an authority declaration on a formal statement of war (Frowe (2011), Page 59-60&63). At long last, the most questionable condition is that wars ought to have a sensible likelihood of coming out on top. As Vittola emphasized, the point of war is to lay out harmony and security; getting the public great. In the event that this can’t be accomplished, Frowe contends it would be smarter to give up to the adversary. This can be legitimate on the grounds that the expenses of war would have been greater (Frowe (2011), Page 56-7). Thusly, jus promotion bellum involves a few circumstances yet in particular: worthwhile motivation and proportionality. This gives individuals an aide regardless of whether entering a war is legitimate. Nonetheless, this is just a single piece of the hypothesis of the simply war. In any case, it tends to be seen over that jus promotion bellum can be bantered all through, showing that there is no conclusive hypothesis of a simply battle, as it is normatively conjectured.>
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