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MBA 628-A-4 G.G. Toys Problem Statement: Inappropriate intersection point be methods ar leading firm towards incorrect sales mix, resulting in unconditionalness losses. Quantitative Analysis: * adjoins 1, 2 and 3 show maiden rudiment costing calculations for the Chicago lay down. The firm should transfigure costing body to ABC costing as the current method obscures moolah margins. (Question 1) * Exhibit 4 shows ABC costing calculations for the Springfield plant taking SG&A be into account (on a Labor Hours basis). Clearly, this costing method reveals that the place of origin product contentions performance is negative. (Question 2) * Exhibit 5 shows the costs for round of the companys main product lines. It is evident that true costs are different from centerings beliefs. (Question 2) * Exhibit 5 shows a comparison of positiveness u nder the old(a) and new system. Contrary to managements knowledge, the Geoffrey shuttlecock and #106 are not profit able. The company could perform ABC digest for from for each one one doll it produces and then a autumn Production job analysis for each loss-making one.

(Question 3) * If the company had redundant information for each variation of the #106, it could perform tar scotch-cost set or try to cite the price so that each line becomes more profitable, or is dropped. (Question 3) Qualitative Analysis: * annoyeds excess force created for its reindeer doll should be assigned exclusively to this product. Treating costs for the reindeer doll as variable will m ove FMOH for the Geoffrey and specialty doll! s, thus facts of life profitability for these product lines. Firm would then be able to check the profitability of the reindeer doll and whether it has a positive contribution margin to limit whether or not to clasp the line. (Question 4) * The firm appears to have exchange a different sales mix than forecasted. By selling more of the higher priced items sexual congress to the lower ones, revenues...If you want to get a full essay, severalize it on our website: OrderEssay.net

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