A) Use CVP analysis to recommend whether the move to paper packaging is a good business decision. Discuss any relevant qualitative factors relevant to the decision. Show all workings. B) The CEO of Primark wants to use your analysis from Part A to decide whether all Primark clothing lines should shift to paper packaging. Outline two reasons why this analysis does not give sufficient information for the CEO to make this decision.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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A) Use CVP analysis to recommend whether the move to paper packaging is a good business decision. Discuss any relevant qualitative factors relevant to the decision. Show all workings.

B) The CEO of Primark wants to use your analysis from Part A to decide whether all Primark clothing lines should shift to paper packaging. Outline two reasons why this analysis does not give sufficient information for the CEO to make this decision.

Cost
Labour Cost
Materials Cost
Fixed Overhead Costs
Expected Sales Volume
Selling Price
Plastic Packagil
$7/unit
$4/unit
$2.5 million
300,000
$20/unit
Paper Packaging
$7/unit
$5.50/unit
$2.3 million
300,000
$20/unit
Transcribed Image Text:Cost Labour Cost Materials Cost Fixed Overhead Costs Expected Sales Volume Selling Price Plastic Packagil $7/unit $4/unit $2.5 million 300,000 $20/unit Paper Packaging $7/unit $5.50/unit $2.3 million 300,000 $20/unit
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