Jet2 Task 2

6. Rise in interest rate could impact the buyers from purchasing and financing high ticket items

Sales price for the mountain bike went up by a very insignificant amount of $1 and forecasted sales were reduced to $18,918 due to the release of the youth bike, which would be KHMJ’s main focus. The youth bikes price was set at $425, $50 higher than the recommended price; along with forecasted sales of 58,099 units. The reasoning behind the huge volume is based on the market size of the youth market in addition to hopes competitors would rather enter road bikes and/or upgrade mountain bikes. Branding was cut down by $500,000 to $200,000 due to a high need of funds to be allocated towards the youth bikes expenses, all extra support was also removed in order to make ends meet. There was a 1 percent decrease in margins for discount stores, otherwise retail margins were untouched. The new youth bike was introduced to increase options and reach new potential markets in order to increase income and shareholder

The third step of the simulation is determining the perceptual map plotting a year after the new motorcycle was released. The marketing manager was assigned to set the points and parameters for the new motorcycle as well as to determine the points under the four existing parameters. In the parameter of lifestyle, the CruiserThorr was given nine points based on research that clearly revealed that customers considered the new motorcycle a status symbol. In the parameter of Quality Engineering, the CruiserThorr earned eight points. This is based on customer responses that showed the respondents we fond of the engine. The parameter of Price earned the CruiserThorr four points. This low score is due primarily to negative pricing. In turn, the company reviewed their financial services and produced a less expensive model. The final parameter, Service, earned the CruiserThorr seven points. This score was given because the company performed dealer training and financial services.

There are several concerns with the forecast budget for year 9. This first concern is in Advertising. Competition Bikes has annually budgeted 2% of gross profit. Due to the weakening economy and -15% reductions in year 8, the concern is not making the forecasted amount of units without increased advertising. Competition Bikes should consider increasing its cost of advertising to help with communication about the company and its product lines to drive higher sales to meet the 3510 units. The second concern is Utilities. In year 7, utilities were running $130,000 or 8.24% of gross profit. During year 7, Competition Bikes sold 4000 units. The concern with Utilities is that it isn’t decreasing to a level comparable to when Competition Bikes had its highest year of production. The third concern is with Research and Development (R&D. Research and Development is designed to allocate funds toward research for the purpose of discovering or creating new products. Year over year, Competition Bikes has only allocated 6% of gross profit toward the research and development of new product lines. To help with the previous years’ -15% in net sales, Competition Bikes should begin more R&D activities to help boost sales to meet the projected number. Another concern is the costs associated with “Other General and Admin Expenses.” The allocation of $170,000 didn’t increase from the previous year; however when Competition Bikes sold their highest volume in year 7, Other G&A expenses

There is a decrease in the budgeted market size compared to the actual market size since the market size has an unfavorable effect of $319,200 on contribution margin. This decrease in the market size makes a negative effect on the services provided by the

In 2003 the actual sales revenue is less than the budgeted sales revenue by 3%. The reason for this is falling sales volume and not falling selling price. This is because quantity variance component of sales revenue flexible budget is higher than price variance component of sales revenue flexible budget. Moreover, cost of production variance is almost 7%. This is attributed to high variances of leather costs, finishing cost and manufacturing overheads. Both variable and fixed manufacturing overheads have a variance of 6%. In case of leather, output variance is higher than price variance. This indicates that BBC has not used leather properly and there was wastage and inefficiency. Furthermore, finishing cost variance is as high as 5%. In this case, price variance (wage-rate variance) is positive (i.e. actual input price more than forecast) and output variance (efficiency variance) is negative (i.e. actual input quantity used per unit of output is less than standard i.e. efficiency improves). That is, finishing costs are rising due to external factors i.e. rising input prices despite improved efficiency.

1. Introduction! The Braaap organisation is a motorcycle manufacturing company driven by a vision of making motorcycling more enjoyable and more accessible. Braaap’s initial vision was to create “WorldClass” motorcycles that are high quality, unique and affordable. Braaap is an emerging company amongst an industry dominated by a few well-established brands.! This report will examine the products and services offered by Braaap, the key characteristics of the company’s operating system, their significance to the market, their pricing policy, pricing variables and their affect on demand. This report will also look into Braaap’s promotional methods, their channels of

Following the disappointing first rollover, KHMJ rebounded with a strong second fiscal period, moving up a position in the industry standings. A key factor in this turnaround was likely the emphasis placed on product advertising (largest amount spent on advertising in industry). Due to the dramatic increase in the awareness of the mountain bike, the company saw a much higher sales figure. This improvement was reflected in an extremely strong EPS ratio (second highest in the industry). In summary, the second

It is difficult to predict our future revenues and appropriately budget for our expenses, and we have limited insight into trends that may emerge and affect our business. For example, during the three months ended March 31, 2012 and the years ended 2011, 2010 and 2009, we recorded quarterly revenues of as much as $58.2 million and as little as $18.6 million and quarterly operating losses of as much as $90.6 million and as little as $4.3 million. In the event that actual results differ from our estimates or we adjust our estimates in future periods, our operating results and financial position could be materially affected.

Motorcycles would be a high capital expenditure for a customer, and therefore price sensitivity would affect bargaining power of customer in this industry thereby reducing the profit for the companies in this industry.

(a) Ducati reduced costs without affecting the WTP for the physical product (i.e. the quality and reliability of the product has increased despite reduced costs). Major reductions were in motorcycle material costs (from 68.2% to 59% of unit costs, exhibit 12) and can be attributed to the following factors: (1) rationalised

Financial crises have hit the world economics quite negatively and passenger 's car segment has been influenced to a great extent. Sales have dropped for more than double and needs of customers have been directed towards motorcycle markets. Yet, as mentioned in the Annual Report of the company in 2010, they

The Executive Director is formulating an Operating Budget recommendation for the next year. He has made a series of assumptions based on previous year performance and expectations about the coming year. He is particularly concerned about increased energy costs and a likely recession that may hold down contributions and foundation support. The CWC wants to budget for a 5% (of total expense) surplus to provide protection against unforeseen events.

| Compute the variable manufacturing overhead rate and efficiency variances for April: (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar.)

Due to the new upgrade the price of the mountain remained the same – following high price, lower volume - as it was assumed that customers would be willing to pay more for an upgraded bike. However, the price of the youth bike was lowered to be more competitive. In terms of marketing, the overall promotional budget was lowered to make up for the lack of cash on hand. In terms of operations, a significant amount of money was saved by reducing the capacity. The unmatched hope for high sales in 2018 left the company with a high surplus of youth bikes, meaning few needed to be produced this year. This allowed the capacity to be significantly decreased as the high price, lower volume strategy required a fairly low number of mountain bikes to be produced. This huge savings allowed for quality and efficiency to increase enough to meet the industry recommendations. In this year, KHMJ recognized the areas in which over spending was occurring. This allowed appropriate budget cuts to be made in order to upgrade the mountain bike and implement other decisions without incurring debt. This supported the financial strategy of remaining debt free after paying off the outstanding long-term debt in 2017.