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

The leaf blower from Lang Manufacturing Co. appears to be in the maturity stage of the product life cycle, indicated by steady sales and profit growth over four years but signs of plateauing in the most recent data.

Step-by-step explanation:

Considering the data provided by the management accountant at Lang Manufacturing Co., we can analyze the stage of the sales life cycle that the product, a leaf blower, is in. The information shows annual sales have a positive average annual change over the last four years but a smaller rise over the last year, indicating the product is still growing but at a slower rate. The unit sales price has been increasing steadily, which could be due to inflation or increased value perception among customers. Notably, although the total profit has grown significantly over a four-year average, there is a slight decline in the most recent year, which might suggest that the product is starting to face challenges such as market saturation or increased competition contributing to rising costs. At this stage, it seems the leaf blower may be transitioning from the growth stage to the maturity stage where the sales growth starts to plateau.

Answer 2

Answer: Maturity

Step-by-step 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.