14 March 2022
Project3
QuestionsReport Template
Instructions:Answer the five questions below.They focus entirely on improving the EBITDA of Largo Global Inc.(LGI)basedontheinformationprovidedintheExcelworkbook.ProvidesupportforyourreasoningfromthereadingsinProject3,Step1,and the discussion in Project3,Step3.Be sure to cite your sources in APA7thed.style.
Provide a detailed response below each question.Use12-pointfontanddoublespacing.Maintaintheexistingmarginsinthisdocument.YourfinalWorddocument,including the questions,should not exceed five pages.Includeatitlepageinadditiontothefivepages.Anytablesandgraphsyouchoosetoincludeareexcludedfromthefive-pagelimit.Name your document as follows:P3_Final_last name_Report_date.
You must address all five questions and fully use the information on all tabs.
Youarestronglyencouragedtoexceedtherequirementsbyrefiningyouranalysis.ConsiderothertoolsandtechniquesdiscussedintherequiredandrecommendedreadingforProject3.Thismeansexplaining whathappenedintheyearforwhichdatawasprovidedtomakerecommendationsfor LGI.
Questions
1. Howmuch o fthe fixed costswereallocatedbetweentheStandard andDeluxe Boxes based on the Lumpsum Allocation Method?IstheCEO correctthatLGIisnot contributing much to company profit? PleaseelaborateonyouranswerandincludeevidencefromTab1oftheExcelworkbook.
Answer
Using the Lumpsum Allocation Method, the fixed cost for the standard and Deluxe boxes were $ 120 and $ 36, respectively. Besides, the contribution margin of the two products was $ 950.40 and $ 153.00 for Standard and Deluxe Box, respectively.
Details
$ Standard Boxes $ Deluxe Boxes
Sales
$ 2,030.40
$ 513.00
Variable cost
$ 1,080.00
$ 360.00
Contribution $ 950.40
$ 153.00
Fixed Cost $ 120.00
$ 36.00
From the data given in the table above, the company’s CEO is correct to say the Deluxe boxes are not contributing much to the company’s profit. The profit from the Standard boxes is 40.90%, while that of Deluxe boxes is 22.81%. However, based on the Lump-sum allocation method used by LGI to allocate the fixed cost, the company should continue producing both products despite the small contribution margin of Deluxe. Any attempt to discontinue the production of Deluxe boxes may result in a decrease in the overall contribution and profits of the company because the exact fixed cost will still be incurred regardless of the volume of production.
2. Theintern suggested splittingthecosts based on sales volumes,asyouhavedoneinthecalculationsperformedinTab2. Explain the impact of the calculationperformedinTab2. Inyourdiscussions,please elaborate on why the answer has changed from the calculations you performed in Tab 1. Also, indicatethebenefitofaccuratecostingwhentryingtoimproveprofitmargins.
Answer
The calculation is done in Tab 2, in which the fixed cost has been allocated based on the sales volume, has increased the profit and contribution from the Deluxe boxes. Based on this method of allocating the fixed cost, the profit margin of Deluxe has increased from 22.81% to 25.48%. The profit margin results have changed from those in Tab 1 because, in Tab 1, the fixed cost were not assigned based on the sales volume; thus, Deluxe boxes shouldered some fixed cost consumed by Standard boxes. Accurate costing is critical when the company wants to increase profit because it will enable the firm to understand the and reduce or eliminate them to boost profits.
3. BasedonthecalculationsinTab3usingABC,commentontheprofitsmadeforeachproduct.Explaininyourreportwhyprofits havechangedunderABCcostingmethod.Alsoindicatewhichofthe systems that is, the traditional systems (using lumpsum or volume-basedcost allocation in Tab 1 and Tab 2) orthe ABC systems (Tab 3)providethebestanswersfordecisionmakingtoimprovecostmanagement improveEBITDA.
Answers
When Activity Based Costing is used to calculate the profit generated from the sale of standard boxes and deluxe boxes, the profit from standard boxes increases to $ 933.56 while that from the sale of deluxe boxes reduces to $ 13.84.The profit has changed under the ABC method because the method usually allocates the on activities. This method has led to an increase in the fixed cost of Deluxe to $ 139.16 and a decrease in the fixed cost of standard boxes to $ 16.84, thus reducing the profit of Deluxes and increasing the profits of Standard boxes.
ABC costing method provides a more accurate valuation of production or sales cost because it assigns the variable cost based on the activity level. ABC method helps to identify various cost drivers and provides insight to the managers on the activities that consume more cost. This information is critical for the managers to and boost EBITDA since controls will be taken to make significant cost drivers effective. On the other hand, the traditional costing method uses a single cost driver in assigning the cost. Thus managers cannot understand other cost drivers making cost management more challenging and complex.
4. The sustainability manager is concerned about the Anti-Deluxe Action groups impact on the company and suggested that the materials and process of making the Deluxe Boxes should be changed. As making the will be less intensive, a suggestion is made that the sellingprice forthe Sustainable Deluxe Boxes could be $23 per unit. ? ProvideevidencefromtheExcelworkbook,Tab4.
Answer
Changing the price of deluxe to $ 23 will be a viable option for the company since it will result in more sales of the standard boxes, thus increasing its overall profitability.
From the data in Tab 4, when the price of sustainable deluxe boxes is changed to $ 23, the overall profitability of LGI increases from 37% reported in Tab 3 to 44% reported in tab 4. When the new price policy is implemented, the company’s total profit increases from $ 947.40 to $ 1066.06. Therefore LGI should implement the proposed pricing policy to boost profitability.
5.IfLargoGlobalInc. decides to sell the Sustainable Deluxe Boxes at the price the CEO demands to maintain the same profit percentage as for Standard Boxes, do you think the new price calculated in Tab 4 is a viable option? Why is it essential for LGI to know what their Break-even quantity is? Also, indicate whichother (non-numericalinformation) shouldbeconsidered when pursuing the Sustainable Deluxe Box option.
Answer
If LGI implements the new pricing policy, the company will maintain the same profit percentage of standard boxes computed using the ABC costing. Under the ABC costing, the profit percentage for standard boxes was 45.98%, the same as the percentage profit under the proposed pricing policy. LGI needs to know the break-even quantity because the break-even show quantity shows the level of sales of products that the company will not be making a profit or loss. The break-even quantity enables the LGI Company to know the level of production that will cover all costs of operation.
Get Professional Assignment Help Cheaply
Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?
Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.
Why Choose Our Academic Writing Service?
- Plagiarism free papers
- Timely delivery
- Any deadline
- Skilled, Experienced Native English Writers
- Subject-relevant academic writer
- Adherence to paper instructions
- Ability to tackle bulk assignments
- Reasonable prices
- 24/7 Customer Support
- Get superb grades consistently
Online Academic Help With Different Subjects
Literature
Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.
Finance
Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.
Computer science
Computer science is a tough subject. Fortunately, our computer science experts are up to the match. No need to stress and have sleepless nights. Our academic writers will tackle all your computer science assignments and deliver them on time. Let us handle all your python, java, ruby, JavaScript, php , C+ assignments!
Psychology
While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.
Engineering
Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.
Nursing
In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.
Sociology
Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.
Business
We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!
Statistics
We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.
Law
Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.
What discipline/subjects do you deal in?
We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.
Are your writers competent enough to handle my paper?
Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.
What if I don’t like the paper?
There is a very low likelihood that you won’t like the paper.
Reasons being:
- When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
- We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.
In the event that you don’t like your paper:
- The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
- We will have a different writer write the paper from scratch.
- Last resort, if the above does not work, we will refund your money.
Will the professor find out I didn’t write the paper myself?
Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.
What if the paper is plagiarized?
We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.
When will I get my paper?
You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.
Will anyone find out that I used your services?
We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.
How our Assignment Help Service Works
1. Place an order
You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.
2. Pay for the order
Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.
3. Track the progress
You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.
4. Download the paper
The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.
PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!
