Marketing Question

Full Answer Section

Slide 3: Variable vs. Fixed Costs

• Define variable costs (change with production volume) and fixed costs (remain constant).
• Examples:
  • Variable: Direct labor, raw materials (cucumbers, spices, jars)
  • Fixed: Line supervisors' salaries, depreciation, property taxes, insurance
• Explain the importance of distinguishing these costs for accurate decision-making.

Slide 4: Traditional vs. Recalculated Cost

• Present the current cost per case of $10 based on the provided report.
• Identify the flaw: attributing all costs (including fixed) to each case, regardless of production volume.
• Propose recalculating considering only variable costs per case.

Slide 5: Recalculated Cost Analysis

• Calculate the total variable cost per case: $15,000 + $11,000 + $10,000 + $30,000 (9,000 cases) = $66,000 / 9,000 cases = $7.33 per case.
• Highlight the significant cost reduction compared to the initial $10.

Slide 6: Super Deals Offer Evaluation

• Analyze the profitability of the offer at $9.50 per case: $9.50 - $7.33 = $2.17 profit per case.
• Emphasize the potential profit even with a discounted price.
• Consider additional benefits like brand exposure and market expansion.

Slide 7: Financial Accounting vs. Managerial Accounting

• Briefly explain the differences:
  • Financial accounting focuses on historical data for external reporting.
  • Managerial accounting provides future-oriented information for internal decision-making.
• Highlight that our recalculation aligns with managerial accounting principles for informed business decisions.

Slide 8: Recommendation

• Recommend accepting the Super Deals offer with the calculated profitable margin.
• Emphasize the benefits of increased sales, market expansion, and potential for future regular orders.

Slide 9: Conclusion

• Briefly summarize the key points:
  • Recalculating costs considering variable costs provides a more accurate picture of profitability.
  • The Super Deals offer presents a profitable opportunity for expansion.
  • Accepting the offer aligns with sound managerial accounting practices.

Additional Information (Optional):

• Appendix: Detailed cost breakdown and calculations.
• Presentation recording (if chosen).
• Report supporting the presentation (if chosen).

References:

• Cite at least two relevant sources supporting your analysis (e.g., textbooks, academic journals).

Note:

• This is a sample framework. You can adapt and expand on it based on your specific analysis and chosen presentation format.
• Remember to adhere to professional presentation and reporting standards.

I hope this helps! Let me know if you have any further questions.

Sample Solution

Acme Pickles: Cost Recalculation and Super Deals Offer Analysis

Introduction:

This presentation analyzes the cost structure of Acme Pickles and proposes a revised pricing strategy for the Super Deals offer. We argue that a recalculated cost approach considering variable and fixed costs can lead to a profitable agreement with Super Deals.

Slide 1: Title Slide

• Title: Acme Pickles: Cost Recalculation and Super Deals Offer Analysis
• Your Name and Team
• Date

Slide 2: Background

• Briefly introduce Acme Pickles and its "Florida's Best" brand.
• Highlight the current production capacity and sales territory.
• Mention Super Deals' offer and the initial concerns regarding profitability.