Compute the unit sales price at which Blake must sell its product in the current year in order to earn a budgeted target profit of £200,000.
Calculate a value in response to the following: Unhappy about the prospect of a price increase, Blake's sales manager would like data regarding the number of units that must be sold at the former price to earn the £200,000 profit.
Calculate a value in response to the following: Believing that an estimated increase in sales is overly optimistic, a company director is requesting data predicting annual profit if the selling price calculated above is adopted but the change in sales volume only amounts to a 10% increase.
To complete this Shared Activity: Post your opinion regarding the question of whether the company should pursue price adjustments versus a focus on increased sales.
Given the data, would you be in favour of a price increase? What other factors would you like to consider in this analysis that have not been addressed yet, and how might they change your opinion?
Respond to at least two colleagues' postings who have taken a different side of this debate.
Discuss your reasons for recommending that company management should take a particular approach.
Within your group, attempt to come to a consensus regarding what you, as a consulting group, would recommend to the company.