B&W Manufacturing Company Case Study

B&W Manufacturing Case Study For represent Accounting It is late(a) 2008 and the owners of BW Manufacturing are preparing their upcoming 2009 direct bud drum. BW manufactures triple models of gas grills and competes directly with some of the largest c exclusively in the broil equipment business. As they review their labor estimates, questions close to the all overall return and advertising strategy of the family have begun to arise. cardinal of those questions is if BW should drop grille A from their product line. This grapple kitty be related back to chapter 6 which was over creating the superior budget. The benefit of creating a master budget is for situations much(prenominal) as deciding to kick upstairs grillroom A or non. It allows the company to analyze the risks of not producing Grill A, and the opportunities they could by chance gain by this decision. From the information provided in Exhibit 1, with producing Grill A, the receipts securi ty deposit is $18,400,000 and the operating in gain is $6,950,000. The calculation of the gross margin with only producing Grill B and C decreases to $10,880,000 and the operating income becomes $ -570,000. BW Manufacturing needfully to produce Grill A along with the other Grills to have a positive operating income, so BW should not limp producing Grill A.

Additionally, BW Manufacturing needs to produce Grill A to cover the fixed personify that are incurred with or without making Grill A. These costs are unrelated to the production ledger and will incur whether all grills are produced or not. Also, the volumes and selling prices of the other two grills hold on the same, so without Gri ll A, BW will be losing m geniusy rather tha! n making money. In the revenues budget the effects of not producing Grill A is shown. fifty-fifty though Grill A does not have the highest production volume of 115,000, it does have the highest sales price of $150 so it is over half of the revenues that come into the company. With BW Manufacturing being one of the wasteder companies and having a small product line...If you want to get a full essay, request it on our website: OrderEssay.net

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