Mkt 6503 hw 1

# Mkt 6503 hw 1 - Mkt 6503 HW#1 January 28, 2007 1. A)...

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Unformatted text preview: Mkt 6503 HW#1 January 28, 2007 1. A) Contribution per CD: \$10- 2-.4-1 = \$6.60 B) Break-even Volume: \$1,300,000/(10-3.40) = 196,969.7 units Break-even Dollars: 196,969.7 x \$ 10 = \$1,969,697 C) Net Profit for 1 million CD’s Revenue \$10,000,000 Cost of Goods Sold (3,400,000) Gross Margin 6,600,000 Advertising &Promotion (1,000,000) Overhead (300,000) Net Profit Before Tax \$5,300,000 D) Volume to reach \$200,000 profit: (\$1,300,000+200,000)/\$6.60 = 227,272.73 units 2. A) x/\$50 = .4 x=20 \$50-20 = \$30 VCI SP Unit Contribution = \$30 - \$6 = \$24 Contribution Margin = \$24/\$30 = .8 B) Break-even Units 125,000+10,000+6,000+200,000 = 341,000 341,000 / 24 = 14,208.3 units Break-even Dollars 341,000 / .8 = \$426,250 C)Market Share: 100,000 units / x = 20% 100,000/.2 = 500,000 units 500,000 units have to be sold to reach 20% market share. 3. A) Absolute Increase in unit sales & dollars to recoup incremental increase in advertising Rash Away 150,000/\$1.2 = 125,000 unitsRash Away 150,000/\$1....
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## This note was uploaded on 04/21/2008 for the course MARK 6400 taught by Professor Smith during the Fall '06 term at LSU.

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Mkt 6503 hw 1 - Mkt 6503 HW#1 January 28, 2007 1. A)...

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