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Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 402 Weeks Ago, 3 Days Ago |
| Questions Answered: | 66690 |
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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Casagrande Company is currently operating at 80 percent capacity. Worried about the companys performance, Mike, the general manager, reviewed the companys operating performance. Following are sales and related cost information about Casagrande, in millions of dollars: Segment North South East West Sales $30 $40 $20 $10 Less variable costs 12 8 21 8 Contribution margin $18 $32 $(1) $ 2 Less fixed costs 9 12 6 3 Operating profit (loss) $ 9 $20 $(7) $(1) A. What is the current operating profit for the company as a whole? B. Assume that all fixed costs are unavoidable. If Mike eliminated the unprofitable segments, what would be the new operating profit for the company as a whole? C. What options does management have to maximize profits? D. What qualitative factors do you think management should consider before making this decision? What impact could these qualitative factors have on the decision?
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