Product planning: Calculate operating profit; maximize profits
Not what you're looking for?
A company is currently operating at 80 percent capacity.
(sales in millions)
Segment
North South East West
Sales $30 $40 $20 $10
Less variable cost ($12) ($8) ($21) ($8)
Contribution margin $18 $32 ($1) $2
Less fixed costs ($9) ($12) ($6) ($3)
Operation profit (loss) $9 $20 ($7) ($1)
A. What is the current operatng profit for the company as whole?
B. Assuming that all fixed cost are unavoidable, if company eliminated the unprofitable segments, what would be the new operating profit for the company as a whole be?
C. What options does management have to maximize profits?
D. What qualitative factors do you think management should consider before making this decision?
Purchase this Solution
Solution Summary
The expert examines product planning to calculate the operating profits in order to maximize profits.
Purchase this Solution
Free BrainMass Quizzes
MS Word 2010-Tricky Features
These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media
Lean your Process
This quiz will help you understand the basic concepts of Lean.
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.