Product Profitability

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Product Profitability

I’m studying for my Accounting class and don’t understand how to answer this. Can you help me study?

Each week, you will be asked to respond to the prompt or prompts in the discussion forum. Your initial post should be 75-150 words in length, and is due on Sunday.

Product Profitability

This week we covered Chapter 5, Cost-Volume-Profit Analysis and Chapter 6, Variable Costing for Management Analysis. Cost-Volume-Profit Analysis is about formulas and ratios used to determine the profitability of individual products and/or operations. Variable Costing is a way to calculate profitability of a firm’s operations by either calculating the contribution margin or gross profit. Still using the company from your Week 1, please discuss how the contribution margin might be used to determine the profitability of that product and how it’s used to make the operations more profitable. Please provide original work. No plagiarizing.

Company from Week 1 Post is below:

Managerial accounting also called cost accounting is the process of measuring after identifying, analyzing, interpreting and also communicating information to the supervisors or the managers in pursuit of objectives of a particular Organization/Company. Fiat Chrysler Automobiles N.V. is an Italian-American Multinational entity and ranked as the world’s number eight largest auto creators (Maryanne M. Mowen, 2015) . The Company is headquartered in the Netherlands with the financial headquarters based in London for purposes of tax filing among others.

At Fiat Chrysler Automobiles N.V, managerial accounting is used in consolidating the stakes with an example of an instance where the Company together with Renault raised the stakes for themselves by ruling out the closure of plants (Maryanne M. Mowen, 2015) . This increases pressure to achieve more than $4 billion, in particular, promised savings for the year from pooling research and procurement investments. Such a plan is a forward move for a merging two entities hence calling for analyzing, interpreting and communicating this information to the stakeholders (Maryanne M. Mowen, 2015) .

References

Maryanne M. Mowen, D. R. (2015). Managerial Accounting: The Cornerstone of Business Decision-Making at Fiat Chrysler Automobiles N.V. Chicago: Advent Press.

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