Reference no: EM132661247

An electronics manufacturer has a Suggested Unit Retail Price of $150.00. Their profit margin is 25.0% and they are offering the following incentives to the retail trade sector to encourage them to sell the product. The retailer (you!) can qualify for:

 

Incentives                              Discounts (%s)                  Performance Requirement
Promotional Allowances              6.0                                  Off-shelf Display
Trade Discount                        28.0                                  Retailer
Cooperative Advertising            $1,500                              Advertising Copy
Quantity Discount                   10.0                                      Less than 10 cases
15.0 10-25 cases
20.0 25 plus cases
Cash Discount 2/10, Net 30 Proper Payment

The manufacturer extends the offer to the retailer on June 1, 2018. The manufacturer receives confirmation of your order on June 8th and payment was received on June12th. You provide the manufacturer with a copy of your advertising and a picture of your display. Finally, your order is for thirty cases. A case contains twelve units.

Your wholesaler qualifies for a ten percent per unit sales commission. If you are the retailer:

Problem a. Given the $150 Suggested Retail and the discounts you qualify for, what is your cost per unit purchase price?

Problem b. Based on your calculations in "a" above, what are the total Gross Margin Dollars you would receive from this deal if you sell at the suggested retail price and

Problem c. what would be your Gross Margin %?

Problem d. If a retailer sets her retail price at $130.00 per unit, what are her Markup @Cost and Markup @ Retail Percentages if you assume the cost she paid for the product was $60?