Lee High, the freshly employed cost accountant at Black heath Manufacturing Company, calculates the variable cost and the fixed cost per unit on a weekly capacity of 500 items of the Great Heath. He utilizes this data to construct a few price strategies. His supervisor, Charlton Black heath, accepts and incorporates the policies and further makes addition of a feature: an increased commission on sales at an increased price. While both High and Black heath is not in the office, the file clerk, Adelaide Lady, takes an order not matching the policies and is sacked. Students are required to design an adequate series of decision policies pertaining to the pricing Great Heath and to assess Lady well's decision. Also, look at "Black heath Manufacturing Company-Revisited case study analysis" (UV1729).
Cost Per Unit Analysis
Correct Profit from Sales-Cost report
Profit if all Orders Accepted
Profit if no LandWell order
1. What is an appropriate set of decision rules for pricing the great Heath?
2. Do you agree or disagree with LadyWell's decision? Why, explain in detail.