You need to evaluate the proposals by showing all the relevant workings and present this at...

  

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You need to evaluate the proposals by showing all the relevant workings and present this at the Board of Directors meeting next month. Write a report to the Board of Directors by providing the analysis of all four proposals Sale (50 000 units) Direct materials Direct wages Fixed production overhead Variable production overhead Administration overhead Selling and distribution overhead Profit/(loss) (£000) ii. 350 200 200 iii. 50 180 120 (£000) 1,000 There are several proposals that have been gathered for consideration: i. Pay salesmen a commission of 10 percent of sales and thus increase sales to achieve break-even point. 1.100 (100) Reduce selling price by 10 percent, which would increase sales volume by 30 percent. Increase direct wage rates by 25 percent per unit, as part of a productivity deal. It is projected that this would increase production and sales unit by 20 percent, and advertising costs would also increase by £50,000. iv. Increase sales by having additional advertising of £300,000, with an increased selling price of 20 percent whilst setting a profit margin of 10 percent. You need to evaluate the proposals by showing all the relevant workings and present this at the Board of Directors meeting next month. Write a report to the Board of Directors by providing the analysis of all four proposals Sale (50 000 units) Direct materials Direct wages Fixed production overhead Variable production overhead Administration overhead Selling and distribution overhead Profit/(loss) (£000) ii. 350 200 200 iii. 50 180 120 (£000) 1,000 There are several proposals that have been gathered for consideration: i. Pay salesmen a commission of 10 percent of sales and thus increase sales to achieve break-even point. 1.100 (100) Reduce selling price by 10 percent, which would increase sales volume by 30 percent. Increase direct wage rates by 25 percent per unit, as part of a productivity deal. It is projected that this would increase production and sales unit by 20 percent, and advertising costs would also increase by £50,000. iv. Increase sales by having additional advertising of £300,000, with an increased selling price of 20 percent whilst setting a profit margin of 10 percent.