The due date for your work is 9:00 AM on Monday October 5, 2020.

SecureCam is a company that sells video cameras to companies in the U.S. that install security systems in homes and businesses. The cameras are purchased by SecureCam from two major suppliers. In both cases, the cameras are shipped from the suppliers’ warehouses directly to the customer, with the cost of shipping paid by the customer. Each of the four sales regions at the company, east, west, north and south, is charged for the cost of the cameras they sell. Each of the four regions also receives a batch of technical materials every year for each of the camera models they sell. Not all regions sell all of the camera models available at SecureCam. Sales agents in each of the regions are paid on commission basis only, which consists of a percentage of the sales price. Your group, acting as outside consultants, have been asked to analyze the sales and profit data for the past year. The only data provided to you is shown below and has been entered into the accompanying Excel file.

The specific issues you have been asked to address are as follows. Please provide descriptive answers and supporting tables for each issue/question.

Questions

1. What was SecureCam’s profit before taxes for the year? What were the sales, costs and profits for the total company?

2. Which of SecureCam’s sales regions was the most profitable? What were the total sales, costs and profits for each region? What conclusions can you draw from this data?

3. Which product generated the most profit for the company? What were the total sales, costs and profits for each product? What conclusions can you draw from this data?

4. Which product generated the most profit in each region? What were the total sales, costs and profits for each product in each region? What conclusions can you draw from this data?

5. SecureCam wants to examine the profit potential of each region. To do this, they need you to determine and specify cost equations for each product. Because sales by unit information is not provided, you will have to specify cost equations as a function of sales dollars (i.e., the change in costs as a function of changes in dollars of sales). Hint: You will have to use the Hi-Low method to identify these equations. What conclusions can you draw from this cost equations?

6. SecureCam is thinking of pressuring their sales people to increase the sales of all products by 10%. Based on the models you specified in question 5, please indicate the increase in the profit by region that will result if all regions increase sales by 10%.

7. The company is also considering a centralized marketing campaign for some individual products. The idea is to focus on products A35 and C10. Please show what the profit for each region will be if sales of products A35 and C10 increase by 20% in each region and the other product sales stay the same.

8. Based on your response to question 7, how much should SecureCam be willing to spend for the marketing campaign for products A35 and C10? Discuss.

9. SecureCam feels that its newest product, Panel Model Z1, may double in sales next year. If company-wide sales of this product does increases by 100% next year, what will be the increase in company-wide profits?

10. Based on the analyses you have conducted in questions 1-9, provide a brief summary statement regarding your observations about SecureCam. No table or exhibit is required for this question.