Description Instructions: Please review all three Articles, and provide a general review of the students response to the article. Three Articles: 100 - 150 words per article Article One Cost-Volume-Profit (CVP) analysis is a useful technique for figuring out how price, sales volume, and costs affect profitability. Businesses can ascertain the number of units required to cover expenses and turn a profit by separating fixed and variable costs (Davis & Davis, 2020). Financial planning, inventory control, and pricing strategies are all heavily reliant on CVP analysis at Camping World. An important application of CVP at Camping World is figuring out the break-even threshold for sales of various RV models and accessories. The large fixed costs associated with RVs, such as financing inventory and keeping showrooms, make it crucial to know how many units must be sold in order to pay for those expenses. Camping World also provides service plans and extended warranties, which have higher profit margins and distinct cost structures. Through the use of CVP research, the business may determine how many warranties need to be sold in order to cover expenses and boost overall profitability. The margin of safety is another crucial idea in CVP that aids companies in figuring out how big a drop in sales can occur before they begin to lose money. In the RV market, where demand is somewhat seasonal, this is particularly crucial. To sustain revenue during slower months, Camping World can modify marketing initiatives or promotional discounts using CVP data (Smith, 2022). Businesses can better prepare for the effects of external events like supply chain disruptions and inflation by using CVP analysis. Businesses that used CVP analysis were better equipped to modify their pricing strategies and preserve profit margins during economic downturns, according to a recent study (Johnson, 2021). In order to make sure the company is profitable even if material costs rise, Camping World may need to examine several pricing possibilities. Ultimately, CVP analysis is a strong instrument that supports Camping World's data-driven choices about financial planning, sales targets, and pricing. Even in a market that fluctuates, the business can maintain its profitability and competitiveness by regularly assessing costs and sales pattern REFERENCES Davis C. E., & Davis E. (2020). Managerial Accounting, Enhanced eText (4th ed.). John Wiley & Sons. ISBN-13: 978EEGRP40373. Johnson, R. (2021). "How businesses can adapt pricing strategies using CVP analysis." Business Strategy Journal, 15(3), 45-59. Smith, L. (2022). "The role of CVP analysis in financial decision-making." Journal of Financial Planning, 28(4), 22-30. Article Two Cost-Volume-Profit or CVP analysis is a powerful financial tool that helps businesses predict future costs and profitability. It is able to do this by examining the relationships between cost structures, sales volume, pricing, and profit margins. Through a process of breaking down costs into fixed, variable and mixed components, CVP analysis allows decision-makers to estimate how changes in production levels, sales prices, and expenses will impact overall future financial performance (Davis, C. E., & Davis, E. 2020). At my company, CVP analysis is used to understand how much product needs to be manufactured to fulfill the needs of the customers and how these figures will change when thinking about scaling this number up or down. They are able to use this analysis of the cost components to forecast how costs will behave as the production levels change or when sales volume changes due to other factors. The product that we manufacture has raw material components that can fluctuate depending on the prices that we get from our suppliers, so understanding and using CVP analysis provides us with insights on our financial performance. An example of how demand fluctuation severely impacted my company’s manufacturing volumes is when COVID hit. As a manufacturer of PPE or Personal Protection Equipment such as nitrile gloves and face masks, the demand skyrocketed more than we were ever prepared for, causing there to be very low inventory or items to be out of stock. Something like COVID is impossible to predict, but using CVP analysis, management can have the ability to see how an increase in raw material costs might affect overall profitability. Another viewpoint that CVP analysis could have potentially helped with if we knew a global pandemic was going to hit was the fact that Thermo Fisher Scientific profitability grew exponentially due to COVID (Thermo Fisher Scientific. 2021). Again, since we could not foresee such an event like, the CVP analysis could have still helped the company understand the effects of heightened demand and needs for increased manufacturing. Reference: Davis, C. E., & Davis, E. (2020). Business environment of C&C Sports. In Managerial accounting (4th ed., Ch.1). Wiley. Thermo Fisher Scientific. (2021). Annual report 2021. Thermo Fisher Scientific Inc. https://s27.q4cdn.com/797047529/files/doc_financials/2021/ar/AR_497849.pdf Article Three 2.29 What is the expected total cost per quarter of Bohlander’s Internet advertising campaign? $1.50/1000 impressions * 1000000 impressions = $1500 Click through cost: 1% of 1000000 impressions 10000 click-through * $0.60 = $6000.00 Total cost $7200 (banner ad development) + $1500 + $6000 = $14700 2. Given Sami’s cost estimates, what is Bohlander’s expected cost of acquiring a new customer through the campaign? 20% click-throughs result in a purchase, thus 2000 purchases. Cost per new costumer total cost/number of purchases = $14700/2000 = $7.35 per new costumer 3. Given Sami’s cost estimates, what is Bohlander’s expected cost of acquiring a new customer through the campaign? Additional click-through cost $0.60 Given that 20% of click-throughs make a purchase, for each additional customer, 5 more people need to click through (1/0.2 = 5 clicks per customer) 5 * $0.60 = $3.00 2.30 1. Was it ethical for Sami to enlist the help of friends and family to drive up the number of click-throughs to Bohlander’s website? Why or why not? No. Sami acted unethically by artificially inflating click-through rates, which misrepresented the effectiveness of the campaign. This deceptive act results in misleading performance measures and undermines the credibility of digital marketing campaigns (Snyder, 2003). It also violates the code of ethics in advertising and could lead to a breakdown of trust between Bohlander Botanicals and Kimland Media. 2. Would your answer to part (a) change if Sami’s friends and family members actually made a purchase from Bohlander? Why or why not? No, because the marketing effectiveness data were still manipulated. Moreover, the sales might not be sustainable, and the company could base future advertising decisions on skewed data. 3. What impact did Sami’s actions have on Bohlander Botanicals? An artificially inflated click-through rate through hyping it up is instantly affected by Bohlander's bottom line as the company pays per click without guarantee of genuine consumer interest at a cost, which can lead to wasteful spending. Additionally, exaggerated figures also have the potential to mislead Bohlander in allocating future marketing budgets because the company will be acting on wrong conversion rates instead of genuine consumer interest. Apart from money, there is also massive reputation risk involved here—if Bohlander learns about the forgery, it could lose confidence in Kimland Media's services and potentially cut business ties and redirect long-term promotion strategies. Added to this, fake online marketing practices carry ethical and legal risks, e.g., possible fines, damage to reputation, and sullied business ties Discussion Organizational policies contribute significantly to the prevention of unethical practice through setting up strong foundations and facilitating ethical decision-making. To prevent such unethical practices, organizations need to perform some measurements of performance so that employees are found to be held accountable for sustainable long-term objectives rather than quantitative short-term goals encouraging manipulation. Ethical modules can educate the employees to recognize and steer clear of frauds, while surveillance systems can quantify advertising impact and recognize aberrations. Encouraging whistle-blowing allows the employees to report unethical practices without fear of reprisals. Nevertheless, aggressive quota systems aimed at revenues alone without ethical controls can force employees to fake numbers, leading to unethical decision-making and reputation loss. Reference Snyder, W. S. (2003). Ethics in Advertising: The Players, the Rules and the Scorecard. Business & Professional Ethics Journal, 22(1), 37–47. http://www.jstor.org/stable/27801301
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