Calculate selling price on the margins provided

Assignment Help Finance Basics

Reference no: EM1353019

As the Marketing Manager for the Zig brand of microwave ovens in a large consumer products company you must answer the questions found below with the following financial information regarding your product.

Total market for Microwave Ovens 5 million units
Current yearly sales of Zig brand 750,000 units
Direct factory labor $13.20 per unit (VC)
Raw materials $50 per unit (VC)
Salesperson's Commissions 10% of Manufactures Selling Price (VC)
All factory and administrative overheads $2,000,000 (FC)
Retail selling price $300 per unit
Retailers margin 20%
Jobber's margin 20%
Wholesaler's margin 15%
Sales travel expenses $800,000 (FC)
Advertising $3 million (FC)

Distribution channel is Manufacturer  Wholesaler  Jobber  Retailer

Questions

1. The selling price for the manufacturer is $163.20. Show how this selling price is determined based on the margins provided.

Answer: ______________

2. Using this selling price, what is the contribution per unit for the Zig brand?

Answer: ______________

3. What is the break even volume in units and in dollars?

Answer: ______________

4. What market share does the Zig brand need to break even?

Answer: _____________

5. What is the current total contribution?

Answer: ______________

6. What is the current before tax profit of the Zig brand'?

Answer: _____________

7. What market share must Zig obtain to contribute a before tax profit of $100 million?

Answer: _____________

Reference no: EM1353019

Questions Cloud

What is the average force exerted on the ball by the bat : A baseball (m = 155 g) approaches a bat horizontally at the speed of 40.5 m/s (91 mi/h) and is hit straight back at a speed of 45.5 m/s (102 mi/h).

Projective personality tests : This solution gives a personal reason as to which personality tests are most intriguing to me and why. I chose the projective personality tests like the Rorschack Ink Blot test

Determine the charge on the sphere : A singly charged ion of unknown mass moves in a circle of radius 14cm in a magnetic field of 8.2 T. The ion was accelerated through a potential difference of 9kV before it entered the magnetic field.What is the mass of the ion.

Relations between personality and culture : Describe how three different perspectives (i.e. behaviorist, humanistic, cognitive, interactionist, evolutionary, and trait perspectives) explain relations between personality and culture.

Calculate selling price on the margins provided : As the Marketing Manager for the Zig brand of microwave ovens in a large customer products company you must answer questions found below with following financial data regarding product.

Describe the advantages and disadvantages of these brand : Describe the advantages and disadvantages of these brand extensions for the Nivea brand. Additionally, explain the managerial assumptions behind the decision to launch the extensions

Give hypertext link of the internet location of program : Describe in one or two paragraphs what you observe. Give hypertext link of the internet location of the program (or applet) you found.

Self-esteem and narcissistic personality style : An explanation of the difference between positive self-esteem and narcissistic personality style.

Illustrate what were the economic incentives for producers : In the former Soviet Union, producers were paid for meeting output targets, not for selling products. Under those circumstances, Illustrate what were the economic incentives for producers.

User Account

All Pages