Question 2: (worth 25 points in total) Gardenia A/S sales department have from their distributers been...

  

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Question 2: (worth 25 points in total) Gardenia A/S sales department have from their distributers been asked about a new product for urban residence living in huge cities, special for export purposes. The new product line consists of small greenhouses that can be placed on balconies, but Gardenia is very much in doubt as to the pricing of the product line. To be able to take advantages of the possibility then they must invest in new technology in the production. They have idle space and can increase the capacity in the storage and the production. The production cost for the type of goods they plan to export is 1,200 DKK per unit. The normal sales price on the Danish market is 3,000 DKK per unit. A foreign customer has now placed an order with the company, offering to place an order at a certain size at a price of 1,800 DKK per unit. 2.1 You are asked if Gardenia A/S should approve of the order or not-state the "clean economic" decision, and then state some problems or possibilities for the company which must be considered thoroughly, when management is taking such decisions. (12%) 2.2 List the main purposes of the budgeting process in relation to the sales and production from a managerial point of view. (5%) 2.3 When Gardenia A/S presents its budgets for its bank connection to apply for an extra credit facilities to be able to deal with the new export possibility, what will the bank typically be looking for in the budgets - and why? (8%) Question 2: (worth 25 points in total) Gardenia A/S sales department have from their distributers been asked about a new product for urban residence living in huge cities, special for export purposes. The new product line consists of small greenhouses that can be placed on balconies, but Gardenia is very much in doubt as to the pricing of the product line. To be able to take advantages of the possibility then they must invest in new technology in the production. They have idle space and can increase the capacity in the storage and the production. The production cost for the type of goods they plan to export is 1,200 DKK per unit. The normal sales price on the Danish market is 3,000 DKK per unit. A foreign customer has now placed an order with the company, offering to place an order at a certain size at a price of 1,800 DKK per unit. 2.1 You are asked if Gardenia A/S should approve of the order or not-state the "clean economic" decision, and then state some problems or possibilities for the company which must be considered thoroughly, when management is taking such decisions. (12%) 2.2 List the main purposes of the budgeting process in relation to the sales and production from a managerial point of view. (5%) 2.3 When Gardenia A/S presents its budgets for its bank connection to apply for an extra credit facilities to be able to deal with the new export possibility, what will the bank typically be looking for in the budgets - and why? (8%)

Answer rating: 100% (QA)

21 WHETHER GARDENIA AS SHOULD APPROVE OF THE ORDER OR NOT LETS LOOK ... View the full answer