Sample Essay on:
Pricing Pecos Printers

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Essay / Research Paper Abstract

A 5 page paper in two parts. Part 1 (4 pages) provides a management accounting exercise in pricing and selling printers. The owner of the company fails to realize he can accept lower unit prices after meeting his fixed costs. Part 2 discusses marketing alliances between the Army and Air Force Exchange Service (AAFES) and outside retailers to increase choices available to AAFES customers without increasing the company's costs and without the need to stock the products. Bibliography lists 3 sources.

Page Count:

5 pages (~225 words per page)

File: CC6_KSacctMgmtPrnt.rtf

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Unformatted sample text from the term paper:

has determined a comfortable and workable price for his companys new printer and has taken a hard-line stand on what offers the companys salespeople will accept from their distributors. Paul has dictated that no salesperson (all work on straight salary, no commission) will accept a price lower than $300 per unit. The purpose here is to assess the true costs and benefits of several scenarios. 1. Evaluate Paul Pecos decision rule. As far as it goes, Pauls decision rule is a good one. If Pecos sells most of its printers at or higher than $300, then its new product should be profitable if the company sells the 10,000 that Paul believes is a reasonable figure for product introduction. Table 1, "Original Rule" column illustrates the bottom line that the company can expect if it sells a minimum of 10,000 printers annually. Table 1. Costs, Sales and Profit Plant Capacity 20,000 Original Rule New Rule Ms. Good-persons Order Totals of All Efforts Number of units 10,000 950 700 11,650 Price /unit 300 249 290 280 ave Total Sales 3,000,000 236,500 203,000 3,439,500 Manufacturing Costs Fixed (total) 450,000 Variable (per unit) 175 175 175 Selling & Admin expenses Fixed (total) Variable (per unit) 30 30 30 Total variable costs 2,050,000 194,750 143,500 Total fixed costs 450,000 Contribution Margin/unit 95 44 85 75 ave Net Income $500,000 $41,750 $59,500 $601,250 2. Evaluate Paul Pecos reaction to Ms. Goodpersons sale. Paul Pecos did not consider the costs and potential profits of ...

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