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Selling Expense
Berkshire’s selling costs amount to 17. ...
Because Berkshire operates a so-called “commodity” business, where products amongst competing companies are very similar, it is not likely for the company to acquire sales by distinguishing their product from others. ...
Depreciation Expense
Berkshire’s depreciation expense amounts to 13% of net sales, exceeding industry average by a large amount. ...
Because Berkshire faces competition from many large manufacturers who are able to make more effective use of economies of scale, it is essential that the company operate at optimum efficiency in order to lower costs as much as possible. Therefore, it is probably an unwise decision on behalf of Berkshire’s management to continue the usage of old and inefficient production equipment. ...
Product mix
Berkshire should not drop the 300 series, as doing so would not decrease costs as shown by the analysis in question 1.
Approximate Word count = 622
Approximate Pages = 2.5
(250 words per page double spaced)
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