Many sales managers have a good intuitive understanding of costs, but they often are imprecise in how they describe the costs. For example, one manager said the following: “Increasing sales will decrease fixed costs because it spreads them over more units.” Do you agree? Explain.
Answer to relevant QuestionsManagers should base pricing decisions on both cost and market factors. In addition, they must also consider ethical and legal issues. Describe the influence that ethics and the law have on pricing decisions.“Qualitative factors generally favor making over buying a component.” Do you agree? Explain.Refer to the preceding exercise. Suppose Nantucket Nectars can use the released facilities in another manufacturing activity that makes a contribution to profits of $75,000 or can rent them out for $55,000. Prepare a ...Explain why it is sometimes best to sell inventory for less than the amount paid for it.Three years ago, the Oak Street TCBY bought a frozen yogurt machine for $11,200. A salesman has just suggested to the TCBY manager that she replace the machine with a new, $13,500 machine. The manager has gathered the ...
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