CVP ANALYSIS RECOMMENDATIONS
The Greenleaf Publishing Company currently pays the author a 70% royalty on all units sold, but the author forgoes advances and pays Greenleaf to market, print, and
edit the book. This is a bit different from the traditional payment method of Greenleaf’s competitors. They tend to employ a more traditional approach to compensating
their authors in that they provide an advance to write the book, and then incur the expenses to market, print, and edit the manuscript. The publisher also pays the
author a royalty on each unit sold above a certain threshold. Management has noticed a decline in the number of authors seeking to publish with the Greenleaf. The CEO
has formed a special taskforce to investigate the loss in volume and formulate a plan of action to positively change the trajectory of the company. You are a member of
the committee. A CVP analysis has been performed using cost, price, and quantity data for both the traditional and non-traditional approach used by Greenleaf. Using
the results from the CVP analyses and additional information you deem to be relevant to this scenario, prepare a recommendation on what actions you believe the company
should consider taking to reverse the current trends and maximize the firm’s potential for long-term success. THE CVP ANALYSIS IS IN YOUR TEXTBOOK. Your recommendation
should contain sound arguments that are well supported, properly vetted, and logically presented. It is important that management carefully consider any potential
ethical implications associated with their stated position. If there are any potential ethical concerns associated with your position, they should be identified and
discussed in the final recommendation. In order to formulate your recommendation, you may want to carefully consider the problem, the three (3) CVP assumptions,
collect relevant data and information, critically evaluate the alternatives, and document your recommendations using sound arguments that are well supported, properly
vetted, and logically presented.
