Product Profitability at Merrydale Limited

  • Andrew M. McCosh
  • Michael J. Earl


This case explores the use of accounting information in decision-making. As the title implies, the case addresses the product-range decision: how to decide which products to drop from a product-line when the company (Merrydale) is making losses. Primarily it is an exercise in relevant costs and the contribution approach to decision-making. However other issues are also raised, for example the need for costing systems and questions of strategy.


Marginal Cost Product Profitability Full Cost Unit Contribution Unit Profit 
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Further Reading

  1. 1.
    For product-market strategy see: Ansoff, I., Corporate Strategy (Penguin Books, 1968).Google Scholar
  2. 2.
    For linear programming see: Haley, K.B., Mathematical Programming for Business and Industry (Macmillan, 1967).Google Scholar
  3. 3.
    For management information design for operational, management and strategic decisions see: McCosh, A.M., Rahman, M. and Earl, M.J., Managing Information (Macmillan, forthcoming)Google Scholar

Copyright information

© Andrew M. McCosh and Michael J. Earl 1979

Authors and Affiliations

  • Andrew M. McCosh
    • 1
  • Michael J. Earl
    • 2
  1. 1.Manchester Business SchoolUK
  2. 2.Oxford Centre for Management StudiesUK

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