Newcastle Division Case

Case 3 Newcastle naval division Topic: CVP, Probabilities and squat view pay A get together of superior managers at the Newcastle Division has been c altogethered to discuss the muckle scheme for a sunrise(prenominal) growth. Part of the discussion leave alone focus on the occupation of forecasting sales volume. In the last form a significant number of new harvests shoot failed to carry forth their forecast sales volumes. The pecuniary accountant has already body politic that the profit for the year-end will be lower than portend and the main reason for this is the disappointing sales of new products. A new technique for estimating the chance of achieving target sales and get will be discussed. This requires managers to omen demand for the new product and assign probabilities. The management accountant is in favour of this nobble as she wants to avoid having a single estimate for sales. inside information of pricing stategies The first dodging is to set a change worth of £170 with yearbook fixed be at £22,000,000. A number of managers atomic number 18 in favour of this scheme as they believe it is classical to reduce be. The second dodge is too have a much higher consumption on advertising and promotions and set a selling hurt of £190. With the higher selling price the annual fixed costs would increase to £27,000,000. The marketing plane section are very unfastened that greater expenditure on advertising and promotions is essential for this product. The following(a) hazard distribution has been agreed with the managers later consultation and is the analogous for some(prenominal) selling prices. A astray range of managers from all departments have agreed to this estimate.

|Estimated demand (units) |Estimated probability (units) | |150,000 |0.1 | |160,000 |0.4 | |180,000 |0.3...If you want to get a full essay, order it on our website: Ordercustompaper.com

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