Calculating Financial Impact: Make/Buy, Add/Remove Segments, and - Course Sidekick (2024)

Chapter 13 Solutions Reflection I completed the assignments correctly. My assignment was operating properly, and I got the correct answers on Chap 13 Problem. For this week, in chapter 13, we are learning about how quantify the financial impact of pursuing a course of action versus another? We focus on Make/Buy; Add/Remove segments; and Special Orders.Further, we calculated the financial advantage (disadvantages) of the situation. Financial advantage (disadvantage) refers to the incremental profit or loss, a company will earn in situations like acceptance of a special order, dropping off a business line, etc. It is calculated by only considering the relevant costs. The incremental revenues and incremental costs are taken together to calculate financial advantages or disadvantages. Financial advantage refers to incremental net operating income and financial disadvantage refers to an incremental net operating loss. In Q1, I calculated the financial advantage (disadvantage) of remove segment by discontinuing flight 482. We can see that the contribution margin is lost if the flight is discontinued $12,950, and the costs that can be avoided are $ 9,750 if the flight is discontinued. Then, we can calculate the financial (disadvantage) of discontinuing the flight is $ 3,200. In Q2, I calculated the financial advantage (disadvantage) of accepting the special order. I calculated the total sales from the orders, then subtract it from the costs associated with the orders. In Q3, we would calculate the selling price would the company establish for its new product using a markup percentage on absorption cost. Further in the semester, I believe we would learn more about profit or loss. The concept that we learned in Chapter 13 would be helpful further. In this chapter, we learned how to calculate the financial advantage (disadvantages) of the situation and compare the financial impact of pursuing a course of action versus another. To get ready for the quiz, I would need to review the assignments for week 5. Concept Overview and Problem assignments help me prepare well for the quiz and understand better the concept and calculation of the quiz. Also, I think every company has a need to use these concepts/tools to calculate effective business operations due to the planning and predictive elements it facilitates.