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Complete the Team Assignment 2 worksheet.

Discuss the following as a Learning Team:

Hillside Furniture Company makes outdoor  furniture from recycled products, including plastics and wood  by-products. Its three furniture products are gliders, chairs with  footstools, and tables. The products appeal primarily to cost-conscious  consumers and those who value the recycling of materials. The company  wholesales its products to retailers and various mass merchandisers.  Because of the seasonal nature of the products, most orders are  manufactured during the winter months for delivery in the early spring.  Michael Cain, founder and owner, is dismayed that sales for two of the  products are tracking below budget. The following chart (in the Team  Assignment 2 worksheet) shows pertinent year-to-date data regarding the  company’s products.

Certain that the shortfall was caused by a  lack of effort by the sales force, Michael has suggested to Lisa Boyle,  the sales manager, that the company announce two contests to correct  this situation before it deteriorates. The first contest is a trip to  Hawaii awarded to the top salesperson if incremental glider sales are  attained to close the budget shortfall. The second contest is a golf  weekend, complete with a new set of golf clubs, awarded to the top  salesperson if incremental sales of chairs with footstools are attained  to close the budget shortfall. The Hawaiian vacation would cost $16,500  and the golf trip would cost $12,500.

Explain whether either contest is desirable or not.  Supplement your analysis by determining the total contribution margin  for Gliders and for Table-and-Chair sets under each of the following  assumptions: actual sales volume at actual selling price, actual  resource usage, and actual costs; and, actual sales volume at budgeted  selling prices, budgeted resource usage, and budgeted costs.

Explain the strategic issues guiding your choice about these contests.

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