. G. Toys is a leading supplier of high quality dolls that are manufactured in two plants within Illinois, one in Chicago, one in Springfield. These dolls are sold in retailors throughout the United States and have an established, loyal customer base due to their high quality and popularity (Campbell & Kulp, 2004). In the last few years, due to rising production costs, their most popular doll, Geoffrey, has seen a decrease in profit margin. In this evaluation we plan to address G.G. Toys existing cost system and offer recommendations on whether management should change the costing system in both the Chicago and Springfield plant. We will calculate the costs of the Geoffrey doll, the specialty branded doll #106 and the cradles using the cost
Under the ABC method, the Geoffrey doll has a very high contribution margin. It would be beneficial for G.G. Toys to increase their advertising campaign to focus on the Geoffrey doll to increase the sales margin. It would also be beneficial for the selling price of the specialty doll #106 to be increased as its true contribution margin was revealed through the ABC method. The contribution margin of the cradle remains consistent, very high, as it is the only product being manufactured in the Springfield plant. Since dolls are often sold with cradles as a package it would be profitable for G.G. Toys to consider pairing the Specialty doll #106 with a cradle in an effort to increase the profit margin of this doll. Bundling products will increase the average sales price for every order. Looking ahead, I recommend that G.G. toys continue in their market research and analysis of each product which will help them to plan for future demand. It would also be beneficial to stay informed of competitors and their pricing. Knowing the competition will help G.G. Toys to understand exactly what their competitive advantages are and help to target their efforts in that marketplace. This will increase their return on their marketing investment and increase their sales yields (Grev,
Toys had a favorable price variance even though they sold less units then they had forecasted. While the price variance is considered favorable as G.G. Toys received a higher than anticipated price, it can also be considered unfavorable. Charging a higher price for the dolls may likely result in less sales which could be one reason for the difference in quantity. It is also possible that a larger quantity of the higher priced dolls were sold which would result in higher sales dollars but a smaller quantity of dolls. It would be beneficial for G.G. Toys to research the quantity of each doll type sold and their price point to determine if this is
I strongly believe that the legitimate power is the most effective one in establishing an ethical climate at Paradigm Toys. To establish a company-wide ethical climate, the company has to have formal power to do so. Expert and referent power are not formal power, so they are not the choice here. Among three formal bases of power – coercive, reward, and legitimate – only legitimate power requires unnecessary surveillance while all of them require all employees to comply with the code of ethics. In other words, coercive and reward power require there is constant surveillance by the influencing agents – i.e. the company’s managers. On the other hand, legitimate power induces the obligation (Raven, 2008). The employees’ recognition
2 + 0.75(100) = 77. However, in any particular year when sales X = 100, the actual cost of goods sold can deviate randomly around 77. This deviation from the average is called the “disturbance” or the “error” and is represented by “e”.
There are many powers that can be effective in establishing an ethical climate. The power that I think would be most effective for Paradigm Toys is referent power. Referent power is described as power of an individual over their employees because of the respect the employees have for them (Randall, 2012). A manager who has referent power will have the trust and respect from their employees which will in turn demonstrate to the employee how they should behave and what ethical behavior looks like. The referent manager will demonstrate the proper ethical behaviors and employees will learn from that and imitate their managers.
The projected revenue of sales for our first year is based on the cost of production, at .25 per disposable water bottle nipple, including packaging. Purchase options will consist of; travel size of 5 sold at $5.57, 12 nipples sold at $11.00, 25 nipples sold at $22.50, and 50 nipples sold at $42.00. The projected sales will be set at a minimum of 12,775 individual packages sold daily, which equals a revenue of $3,421,875 annually. Listed below is the expected breakdown:
To determine if Lille Tissages, S.A. should lower the price to FF15.00/m or not we need to consider the Variable costs and the Contribution margin associated with Item 345.
... wouldn’t change the way the toys are made, but I would change the placement of them. It would give children the opportunity to play with whatever they like.
Hammond Cards, Inc. is a small player of the greeting cards industry in the United States of America due to the fact that their annual revenues equate to less than 1% of the industry leaders as described in the case. In their effort to stimulate growth, however, Wendy Hammond has employed me to analyze the potential acquisition of another company, Creative Designs. My analysis will firstly look at the main issue behind this acquisition and then further break it down into sub-issues that I will address individually. Since both of these companies follow a different strategy I will evaluate the two different companies and discuss the implications of their strategies on the merger. I will then perform various cost analysis to determine the cost structures of the two firms which will help me identify whether Wendy’s intentions can be carried out. In my analysis I will aim to figure out the practical capacity of the firms and get an indication on whether their current operations are using the optimal level of capacity and minimizing waste. This data will help me with my strategic recommendation of acquiring Creative Designs and fitting it in with the current strategy of Hammond C...
There are numerous costs of production for Nike Company which can be placed into two categories: fixed costs and variable. Fixed costs are those that remain the same for all production and variable costs change with each project. The organization’s manufacturing process, machinery, research and development costs make up the fixed costs. On the other hand, administration, distribution, labor and raw material are the variable costs. All of these are required in the organizations operation to ensure that it remains profitable. Production cost for each shoe is between $30 and $100 and they are sold at $100 to $300. Therefore, the organization stands a good chance of making a profit (Nike, Inc., 2012).
Lululemon’s has to produce and sell 150,000 jackets in order to cover their total expenses, fixed and variable. At this level of sales, Lululemon’s will breakeven (profit = loss).
Barbie has transformed herself from a simple doll to a household name worldwide. From first being introduced in early nineteen fifty-nine by toy manufacturing giant, Mattel, Barbie has grown to become the world’s top selling doll on the market – “accounting for half of Mattel’s $1.4 billion in sales” (Rogers). Known for her long, shapely legs, small waist, full chest, and charismatic smile, Barbie has become the epitome of beauty. However, Barbie’s appeal does not just stop at her looks. With nearly every imaginable career, lifestyle, and look of the doll mass marketed by Mattel, Barbie has evolved herself into one of the most successful and commendable image presented. The dolls has seamlessly accomp...
LEGO company had some crisis during 1992 until 2004 which led to the downfall of the company. Since 1992, LEGO’s profits had turned down and unfortunately in 1998, it posted its first ever loss which was at £23 million. Moreover, 1000 employees of the company were laid off in the exact same year of their loss. The first LEGO products featuring licensed characters which were not designed in-house were LEGO Star Wars and Winnie The Pooh. They were created in 1999. While in 2000, LEGO Harry Potter characters to figures from other Steven Spielberg movies were created. The head of the LEGO Concept Lab, Soren Holm said, “Even though toy weapons had always been hotly debated, but since the company released the LEGO Star Wars, LEGO has been
Stone, Tanya Lee. The Good, the Bad, and the Barbie: A Doll's History and Her Impact on Us. New York: Penguin Group, 2010. Print.
Toy World, Inc is a manufacturer of plastic toys for children, founded in 1973 by David Dunton. In the past, the company's production schedules had always been highly seasonal, reflecting the seasonality of sales. Jack McClintock, president and part owner of this company, is considering a proposal to adopt level monthly production for the coming year.
Top managers should be reminded that they are ultimately responsible for the quality of a product and the company. Quality management is one of the keys. By defining quality in operational terms, understanding the costs and benefits of quality, recognizing the consequences of poor quality, and recognizing the need for ethical behavior (Stevenson, 2012), will lead to a more productive operation. If Toys, Inc. specifically doesn’t want to hire additional positions to inspect quality they could outsource to a company such as SATRA whom from its website states, “SATRA can assess the risk of injury from a toy, as well as carry out analysis for the presence of restricted metals such as lead, chromium and mercury(2015).” Quality is the ability of a product or service to consistently meet or exceed customer expectations (Stevenson, 2012). Quality when it comes to manufacturing of toys especially those that have moving parts also brings in safety concerns. “Market watch officials and technological experts have warned parents to pay more attention to the quality of toys they purchase to better protect their children (Hazell, C 2011).” Parents will associate a poorly made toy, especially one that already knows that it’s poorly made by having a trade-in program as potentially dangerous for their son or daughter. Continuing to have customer dissatisfaction will further question the quality of our product and in turn the safety of our