Reference no: EM133099204

Which formulas for below questions?

Unit 1: Negotiations and Planning for Successful International Transactions Q 1: Congratulations! You've been hired as the new sales manager at Gamma Imports. Your first job is to determine which pricing strategy; skimming or penetration, will result in the greatest profits for a new product sold by Gamma Imports. You have been given the Product Cost (CAD), Skimming Retail Price (CAD), Skimming Sales Forecast (Units), Penetration Retail Price (CAD), and the Penetration Sales Forecast (Units). You need to calculate the margin % for the two strategies, the gross margin dollars for each strategy, and figure out which strategy will provide the greatest gross profit. (Gross profit is profit before SG&A expenses.) Which strategy do you recommend? Why? (You need to calculate all figures to two (2) decimal places.)

Q 2: Maple Leaf Sports (MLS) sells a very popular recreational product in Canada for a list price of Wholesale List Price CAD. MLS has received an enquiry from a Japanese distributor wishing to buy the product for resale in Japan. The Japanese distributor explained that the company would take the Japanese landed cost of the product and use Distributor's Margin % to arrive at the wholesale price for sales to the retail sales outlets in Japan. The landed cost of the product CIF (cost, insurance, and freight) to the point of destination would work out to CIF Cost CAD before import duties. Japanese import duties are calculated and charged on the CIF price and are Duty Rate %. The Japanese retailers require a margin of Retailer Margin %. The current exchange rate is JPY EXCHANGE RATE (Japanese Yen) to 1 CAD. What will the JPY retail price be in Japan? (You need to calculate the answer to two (2) decimal places.)