A small manufacturer of gas grills make final amendments to its 2009 operating budget and considering several changes in pricing, advertising and product availability. This brief case depends on the analysis of the contribution as a simple way to profit planning issues such as adding or deleting a product or service to analyze, change a price, adding or decreasing amounts expected a profit or production budget. In this situation, there are three items with different proportions of variable … Read more »

A small manufacturer of gas grills make final amendments to its 2009 operating budget and considering several changes in pricing, advertising and product availability. This brief case depends on the analysis of the contribution as a simple way to profit planning issues such as adding or deleting a product or service to analyze, change a price, adding or decreasing amounts expected a profit or production budget. In this situation, there are three products, each with different proportions of variable and fixed costs. The product with the highest profit / unit on a full-cost basis has the lowest contribution / unit on a variable cost basis, and vice versa. Four different marketing plans are proposed before finally adopted as the plan for the year. At the end of the actual results of the household and a Flex or adjusted budget were realized on the actual quantities can be compared. The numbers are simple and the students can easily see the benefits of the variable calculation.
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Brandt Allen
Source: Darden School of Business
5 pages.
Release Date: 8 July 2009. Prod #: UV1767-PDF-ENG
BW Manufacturing Company HBR case solution