Question

The management accountant at Lang 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 $ 2,700,000 + 1.8 % + 23.5 % Unit sales price 450 + 2.4 % + 8.3 % Unit profit 100 − 1.0 % + 3.0 % Total profit 600,000 − 1.2 % + 30.0 % The stage of the sales life cycle the product is in is:

Answer 1

Answer: Maturity

Explanation:

When a product gets to Maturity level, it will see its sales slow down. The sales will still be increasing but at a very low or stable rate.

At the growth state however, sales will be growing at a fast rate and so will profit.

This product is at the maturity stage because over the previous year, its sales have slowed down and are now increasing at a very low rate as a mature product would. In the past four years it was in growth based on the given figures but as of the last year, it had crossed over into maturity.