Course: Integrated Enterprise Systems Q. Consider this scenario: HappyHome is a
ID: 2579806 • Letter: C
Question
Course: Integrated Enterprise Systems
Q. Consider this scenario:
HappyHome is a factory specialized in manufacturing some ranges of home appliances. HappyHome is having a sale transaction selling of washing machines and freezers to a wholesale distributor, named Homy. Details of this transaction are depicted in this table:
Quantity
Unit selling price
Unit cost price
washing machine
10
SAR980
SAR450
freezer
15
SAR680
SAR350
Record financial impacts of this sale transaction for HappyHome.
N.B. Show financial impacts for all steps of the transaction in only one figure.
*The answer should not be long and it must be unique not plagiarized. Please make sure that the answer can be copied and paste into Microsoft Word Not a Picture.
Quantity
Unit selling price
Unit cost price
washing machine
10
SAR980
SAR450
freezer
15
SAR680
SAR350
Explanation / Answer
The financial impact here is profit from the selling of washing machine and freezer with margin of investment. The profit is equal to (SAR980 - SAR 450 )* 10 washing machines is equal to SAR 5300. The profit from sale of Freez is equal to (SAR680 - SAR350 * 15 freezers is equal to SAR 4950 and total profit is equal to SAR10250.
Margin of investment from washing machine is equal to (SAR980 -SAR 450)/SAR450 = 100.18%, where as margin of investment from FReezer is equal to (SAR 680 - SAR350)/SAR 350 = 92.29%. From the profit margin it is clear that the investment in washing machine is best option than investment in Freezer. The overall margin of investment is ((SAR 980 *10 + SAR680 *15 )- (SAR 450*10 +SAR 350*15) )/(SAR 450*10 +SAR 350*15) ) = 100.05%.
Conclusion: The profit margin from washing machine more that Freezer but it may difficult to sale more washing machine as compare to Freezer , so it is better option to mix up the both and overall prifit margin is very good and one can mix up upto the break even point.