The Profitability of a Company Product

Extract

[...] The Sales Manager thinks that a special discount of 10% on the selling price would significantly increase the sales volume of What level of activity would be necessary to make this 10% discount interesting in terms of profitability? Comment PRODUCT B Volume Price/Cost TOTAL -2000000 INCREASING OF - The Marketing Manager suggests launching an advertising campaign to boost sales of and try to increase the contribution of this product to the overall profit of the company. This campaign is estimated at Euro What level of activity would be necessary to make it interesting in terms of profitability? [...]

[...] The Profitability of a Company Product A company manufactures and sells two types of products: model and model. Here under is the financial situation: A Volume Euro unit Euro subtotal B Volume Euro unit Euro subtotal Euro TOTAL REVENUE Variable Costs Contribution Margin Direct Fixed Costs Segment Margin - Indirect Fixed Costs Global net income net income 15,71 The global net income of the company seems to be favorable. However, there is a concern about the profitability of each product taken separately - Calculate for each product, the level of activity (in volume) that allows covering its direct fixed costs. [...]

[...] What two actions can we suggest to increase the Contribution Margin in order to cover the specific costs of this product? - increase the volume - increase sales price - decrease the contribution margin If, despite the actions suggested in the preceding question, the Segment Margin of the model remains negative, on what condition can we get rid of this product, without decreasing the global net income? We can get rid of this product without decreasing the global net income on condition that we make at least 1 million to make up for it. [...]