Here is the synopsis of our sample research paper on Contribution Margin With Absorption Costing for Pecos Printers, Inc.. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
A 4 page paper discussing Pecos Printers, Inc pricing. Elements included are contribution margin income statements, variable and absorption costing, and variance analysis.
Bibliography lists 1 source.
Page Count:
4 pages (~225 words per page)
File: CJ6_KSacctMgmtPeco2.doc
Buy This Term Paper »
Unformatted sample text from the term paper:
Paul Pecos is the owner of Pecos Printers, Inc. in Houston, Texas that manufactures color ink jet printers, targeting the small businesses market. For control purposes,
he has mandated specific guidelines for his sales team to follow in determining whether to accept or reject an offer from distributors. His sales team is paid on a
salaried basis with no commission, so Pecos does not have to include this as a variable cost in determining marginal profits for sales of printers. Paul rules are to
reject any offer below $300/unit. He cannot sell a unit for more than $400 to a distributor based on current retail prices and standard markups of 50%. Does
this rule emulate the best possibility for any scenario? To determine this, we need to evaluate several different scenarios by cost analysis. 1. The Decision Rule
As a standard guideline, Paul Pecos rule is a good place to start. His controller has assumed an annual sales figure of 10,000
units, and if most of his printers are sold at $300 or above, the new product will be profitable. The first column in Table 1 compares cost, sales and
income. Non-manufacturing costs and taxes are not evaluated for this situation. Table 1. Costs, Sales and Operating Income Flexible Budget Actual
Budget Yearly Monthly Current With Glenda Sales $3,000,000 $250,000 $286,000 $489,500 Variable Costs 2,450,000 204,167 226,625 398,125 Contribution Margin 550,000 45,833 59,875 91,375 Fixed Costs 450,000 37,500 37,500 37,500
Operating Income $100,000 $8,333 $22,375 $53,875 2. Pauls reaction to Ms. Goodpersons Sale A Pecos Printers, Inc. salesperson, Ms. Goodperson, was fired
...