Bw Manufacturing Essay

CASE SUMMARYThe owners of BW Manufacturing, a small manufacturer of gas grills, put up prep bed a preliminary compute for the upcoming year and would like to valuate the financial impact of several substitute scenarios, including dropping a harvest-time changing the price on a product, with a resulting improver in pot and displacement advertising focus, with a resulting shift in volume from one product to an opposite. A new figure must be prepared. At year-end, the f actual results are dampen than had been planned, but not necessarily weaken than what should have been, given actual gross revenue volumes.TEACHING OBJECTIVESThis short case addresses the proposition of contribution analysis as an indulgent way to analyze profit-planning issues such as adding or dropping a product or ser immorality changing a price adding or decreasing judge volumes or preparing a profit budget. In this situation there are tierce products, each with different proportions of variable an d mulish costs. The product with the highest profit per unit on a full cost nucleotide has the lowest contribution per unit on a variable cost basis, and vice versa.Four different marketing plans are proposed before one is finally take as the plan for the year. At year-end the actual results can be compared with the budget and with a flex or set budget based on the actual product volumes realized. The numbers are undecomposable and the students can readily see the make headway of variable costing.2. cypher the impact of less(prenominal)en the grillwork C price to $75, with the scene that the volume of that product will adjoin to 220,000 units. Assume no other potpourris to the plan. 3. Calculate the impact 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. Prepare a rewrite 2009 profit budget assuming the owners chose resource 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?