Submitted by: Submitted by tanika13
Views: 73
Words: 266
Pages: 2
Category: Other Topics
Date Submitted: 02/22/2015 07:24 PM
Marketing Arithmetic Exercise Calculations
Initial Data: Margin Structure Factors: Retail Price: $ Retail Margin/Unit: Wholesale Margin/Unit: Variable Mfg. Cost/Unit: $ Shipping, etc./Unit: $ Commissions: 1.00 33% 12% 0.09 0.02 10% Market Factors:
Variable Cost Factors:
Fixed Cost Factors:
Question 1: What is the unit contribution for Brand X? Key Formulas: Wholesale Selling Price = Retail Price x (100% - Retail Margin/Unit) Manufacturer's Selling Price = Wholesale Selling Price x (100% - Wholesale Margin/Unit) Commissions/Unit = Commission x Manufacturer's Selling Price Contribution per Unit = Manufacturer's Selling Price - Variable Costs/Unit Step 1: Determine Manufacturer's Selling Price Wholesale Selling Price: $ 99.67
Manufacturer's Selling Price: $
87.71
Step 2: Determine Total Variable Costs Variable Mfg. Cost/Unit: $ Shipping, etc./Unit: $ Commission/Unit: Total Variable Costs per unit: $ Step 3: Determine Unit Contribution Unit Contribution: $ Question 2: What is Brand X's break-even point? Key Formula: Breakeven Units = Fixed Costs divided by Unit Contribution Fixed Costs: $ Breakeven Units: 900,000.00 11,418 78.82 0.09 0.02 878% 8.89
Question 3: What market share does Brand X need to break even? Key Formula: Breakeven market share = Breakeven Units divided by Total Units in Market Breakeven Market Share: Question 4: What is Brand X's profit impact? Key Formulas: Unit Volume = Total Units in Market x Market Share Profit Impact = (Unit Volume x Unit Contribution) - Fixed Costs Unit Volume: 4,800,000.00 Profit Impact: $ 369,336,000 0%
Total Units in Market: Brand X Market Share:
20,000,000 24%
Fixed Mfg. Costs: $ Advertising Budget: $ Prod. Mgr. Salary: $
900,000 500,000 35,000