Question

The management accountant at Jang Manufacturing Co. collected the following data in preparation for a life-cycle analysis on one of its products, a leaf blower: The stage of the sales life cycle the product is in is:

Answer 1

Complete Question:

The management accountant at Jang Manufacturing Co. collected the following data in preparation for a life-cycle analysis on one of its products, a leaf blower: Item This Year Change Over Last Year Average Annual Change Over the Last Four Years Annual sales $3,200,000 -2.4% +3.5% Unit sales price 500 -2.1% +3.3% Unit profit 100 -10.0% +2.0% Total profit 700,000 -1.2% +3.0% The stage of the sales life cycle the product is in is:

Answer:

Jang Manufacturing Co.

The stage of the sales life cycle the product is in is:

The introduction stage.

Explanation:

a) Life-Cycle Analysis of the Leaf Blower:

Item                                This Year Change   Average Annual Change

                                         Over Last Year       Over the Last Four Years

Annual sales $3,200,000    -2.4%                          +3.5%

Unit sales price         500     -2.1%                          +3.3%

Unit profit                   100   -10.0%                          +2.0%

Total profit         700,000     -1.2%                          +3.0%

b) The sales life cycle is a series of sales steps that the seller takes in order to convert a customer to make a buying decision.  It starts with the introduction stage when the seller creates customer awareness.  At this stage of the sales life cycle, the product can be likened to a potential STAR.  Like Stars with potential, the initial sales efforts can eventually  grow to become successful customer closes.