Chloe Enterprises' Marketing Strategy Analysis

This assignment requires an analysis of Chloe Enterprises' new marketing strategy for the 2016 financial year. Students must evaluate the proposed changes to fixed and variable costs, and determine the potential impact on total units produced, revenue, and overall profitability. The analysis should consider both the positive and negative aspects of the strategy and offer a recommendation to Chloe Enterprises based on their findings.

Running head: ACCOUNTING FOR DECISION MAKING
Accounting for decision making
Name of the university
Name of the student
Authors note

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ACCOUNTING FOR DECISION MAKING
Table of Contents
Requirement 1:.................................................................................................................................2
Requirement 2:.................................................................................................................................2
Part b):.............................................................................................................................................3
Question 2.57:..................................................................................................................................3
Requirement 1:.................................................................................................................................3
Requirement 2:.................................................................................................................................3
Part c):..............................................................................................................................................5
Question 10.32:................................................................................................................................5
Requirement 1:.................................................................................................................................5
Requirement 2:.................................................................................................................................6
References list:.................................................................................................................................7

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Part a):
Question 9.45:
Requirement 1:
Increment of room rate 10% 0%
Month December January February
No of Rooms 20 20 20
Average room rate $180.00 $198.00 $198.00
Occupancy rate 90% 95% 85%
Budgeted room revenue $3,240.00 $3,762.00 $3,366.00
Requirement 2:
The occupancy rate of hotel is total number of rooms in hotel that have been booked
by customers and it is expressed as percentage of room booked. One of the most vital factor for
hotels is occupancy rates. Hotel revenue is dependent on occupancy rates and hotel capacity
being more than occupancy rate is indicative of losing selling opportunities and declining
revenue. Management of Dorquay hotel could estimate occupancy rates by given two standards
and they are:
Room occupancy rate- Occupancy rates of hotel as per this standard is expressed in
the form of relationship between total numbers of rooms in hotel that can actually be occupied
and numbers of room occupied by inmates. This is a rule of thumb approach (Anderson et al.,
2015). However, management of hotel can implement other method for estimating room
occupancy rates such as market condition approach and Hubbart formula approach.
Bed occupancy rates- Occupancy rates of hotel as per this standard is estimated by
relationship between capacity of hotels and number of beds that are occupied by hotel inmates

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and guests. Capacity of hotel is the total number of beds that can be offered by hotel to their
guests.
Part b):
Question 2.57:
Requirement 1:
Suggestion to Mr. Smith by sales person of Software Company to go to Los Angeles for
proper analysis of software packages along with his family should be done without violation of
any laws of both the countries that is applicable to organization. Mr. Smith should take the trip
with his family as the sales person has suggested for making him relaxed and feel comfortable so
that he can undertake the analysis of recommending proper software packages. All the expenses
relating to trip would be borne by Dogto Ltd and Mr Smith should not have any objection to trip.
However, it is required by Dogto Ltd to consider some factors and they should not enter into any
such agreements that would expose employees to any exploitative practices. It is required by
organization as well as individual employees to adhere to all applicable legal requirements and
regulations. While working on any particular project in foreign countries, unless employees
having proper authority, they should not execute any documents (Butler & Ghosh, 2015). For
maintaining ethical concerns, they must maintain and adhere to all policies and it is required by
companies to adhere to all foreign legal requirement that would prevent employees form getting
engage in any unethical practices.
Requirement 2:
Some advantages of having employees code of conduct are as follows:

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 It is depicted that employee’s code of conduct will help organization in cementing
preventing interest conflicts among employee at company level. Rules of conduct will
help in predicting behavior of employees by prevention of illegal wrongdoing and some
unethical practices.
 Corporation activity is affected by employment of code of conduct as they are useful
platform for stakeholder, community and corporation as a whole.
 Code of conduct now a days have become a part of compliance program of government
and helps in ensuring fair market competition and illegal behavior.
 Tools of code of conduct can be adjusted to the needs of company and helps in ensuring
fair market competition. Company is able to generate financial gains and higher
profitability for their employees with the help of established code of conduct.
Some disadvantages of having employee code of conduct are as follows:
 By nature, codes of conduct are not binding and they are just regarded as internal rules
that are to be followed by employees. Such code of conducts remain futile if they are not
efficiently monitored and they are not motivated to respect such rules (Dutt & Gonzalez,
2015).
 Some of criticism relating to rights of employees and mechanism explanation by focusing
on the broad and vague language of the codes. Sometimes, international standards are
ignored by the employee’s code of conduct and this creates difficulties in their
enforcement.
 Code of conduct can be used against employees that leads to unveiling of unethical
behavior and limit their freedom to speak out in retaliation fear. It is certainly possible

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that concerns of interest of investors would pressurize management to ignore rules and
moral principles (Pettigrew, 2014).
Some of measures that can be included in employee’s code of conduct comprise of
proactive measures for ensuring success of business and grow culture of organization in such a
way that it helps employees in thriving.
Part c):
Question 10.32:
Requirement 1:
Annual volume 35000 units
Selling price per unit $60.00
Variable manufacturing cost per unit $28.00
Annual fixed manufacturing costs $120,000.00
Variable marketing and distribution costs per unit $12.00
Annual fixed non-manufacturing costs $370,000.00
Total Fixed Costs $490,000.00
Total Variable costs $40.00
Contribution Margin $20.00
Contribution Margin Ratio 33.33%
Expected annual sales $2,100,000.00
a] Break-Even

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In units 24500 units
In Dollars $1,470,000.00
b] Margin of safety
In units 175 units
In Dollars $630,000.00
c] Profit Achieved
Annual Volume 32000
Contribution Margin $20.00
Total Profit $640,000.00
d] Desired Units
Revised variable marketing and distribution costs per unit $16.00
Revised Annual fixed non-manufacturing costs $290,000.00
Total Fixed Costs $410,000.00
Total Variable costs $44.00
No of units 40000 units
Requirement 2:

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Chloe Enterprises has introduced change in their marketing strategy for financial year
2016 that is designed to reduce total fixed cost and increase variable and distribution costs. It can
be seen from above table that implementation of proposed marketing strategy would lead to
increase in total no of unit produced. Total number of units produced prior to implementation of
strategy is computed at 35000 and total number of units after strategy implementation is 40000.
Moreover, there has been considerable reduction in total fixed overhead costs with the strategy
implementation. However, total variable cost has increased from $ 41 to $ 44. Comparing total
variable overhead cost, foxed overhead costs have change significantly. Chloe Enterprise can
increase their revenue by selling increased level of output and revenue generation would help in
offsetting further increase in variable costs (Hartman et al., 2014). Therefore, it is recommended
to Chloe enterprise to implement the proposed strategy.

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References list:
Anderson, D. R., Sweeney, D. J., Williams, T. A., Camm, J. D., & Cochran, J. J. (2015). An
introduction to management science: quantitative approaches to decision making.
Cengage learning.
Butler, S. A., & Ghosh, D. (2015). Individual differences in managerial accounting judgments
and decision making. The British Accounting Review, 47(1), 33-45.
Collier, P. M. (2015). Accounting for managers: Interpreting accounting information for
decision making. John Wiley & Sons.
Dutt, V., & Gonzalez, C. (2015). Accounting for outcome and process measures in dynamic
decision-making tasks through model calibration. Journal of Dynamic Decision
Making, 1, Article-2.
Hartman, L. P., DesJardins, J. R., & MacDonald, C. (2014). Business ethics: Decision making
for personal integrity and social responsibility. New York: McGraw-Hill.
Ishaque, M. (2017). Managing conflict of interests in professional accounting firms (Doctoral
dissertation, Anglia Ruskin University).
Pettigrew, A. M. (2014). The politics of organizational decision-making. Routledge.
Strauss, E., Kristandl, G., & Quinn, M. (2015). The effects of cloud technology on management
accounting and decision-making. Management and Financial Accounting Report, 10(6).