Lovely Scent Perfume Co: optio

The Lovely Scent Perfume Company has recently suffered record losses. Fredrick Fragrance, the CEO, has asked four of his top executives to recommend a strategy to put the company back on a profitable track.

Wally Workshard, the Executive Vice President, suggested that the company drop its price by 20% and predicts that this will increase sales by 85,000 units per year.

Lester Ledger, the Chief Financial Officer, suggested that the company repackage the product in designer bottles. This would add $4.75 per unit to the production cost and fixed production costs would be increased by $40,000 per year. Lester predicts this would increase annual sales volume by 32%.

Buster Bumble, the Production Manager, suggested that the company reduce the size of the standard bottle by 10%. This would save $2.65 per unit in variable production costs. He predicts sales volume would drop by only 4,500 units per year.

Gaylord Goodspeak, the Marketing Manager, suggested that the company increase its marketing budget by 66% – this would add $527,000 per year to fixed operating expenses. In addition, he recommend raising the price by $4.90 per unit. He predicts that the combined impact would be a 17% increase in annual sales volume.

Use the appended spreadsheet to evaluate each of these proposals independently. You will need to fill in the inputs based on the numbers above. The spreadsheet will then do the remaining calculations. Recommend the best strategy for Mr. Fragrance. Make sure you support your answer with relevant numbers and arguments.

200,000.00
35.00
16.00
2,750,000.00
4.00
1,250,000.00

Lovely Scent Perfume Company
Contribution Margin Income Statement
For the Year Ended December 31, 2006

Revenue 7,000,000.00
Variable Costs 4,000,000.00
Contribution Margin 3,000,000.00
Fixed Costs 4,000,000.00
Net Income -1,000,000.00

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more