Question

In: Accounting

A beverage company is considering whether to discontinue its line of grape soda. What factors will...

  1. A beverage company is considering whether to discontinue its line of grape soda. What factors will affect the company’s decision? What is a qualitative factor? Which of the factors you listed are qualitative?
  2. What factors would be relevant to a restaurant that is considering whether to make its own dinner rolls or to purchase dinner rolls from a local bakery.

Solutions

Expert Solution

1) factor to consider whether to discontinue the product or not

impact on overall profitablity of the company. if th product is dropped what is the effect on the total income of the firm. does the product have positive contribution? which costs are avoidable and which are unavoidable ? whether capacity freed can be used for other purpose which gives incremental contribution ?

impact on employees - how to handle employees who are working in the product divison. shoud they moved to other department or ask them to leave the job ? what is the imapct on the morale of employees ?

consumer demand -whether the product is still having demand ? how consumer percieve non availability of product in the market place ?

brand image- is the product well known in the market ? how discontiuning would affect the existing products ? any sales loss for existing products ?

is there any overall impact on reputation of the company ?

supplier relationships and how they will impact for other products in the company ?

2) relveant to making dinner rolls

cost of labour

cooking ingredients

larger cooking space and untensils

relevant to purchasing dinner rolls

purchase price

transportation price

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ekkarill92 answered 1 year ago
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