{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Homework # 5 - BCOR 2400 Homework 5 1 Cost $1.53 $1.75...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
BCOR 2400 4/3/08 Homework # 5 1. Cost Price $1.53 Manufacturer $1.75 Oreo holds 7.5% Market Share Marketing Expenses = $37,200,000 Operating Fixed Costs = $43,000,000 Net Marketing Contribution = Market Demand x Market Share x (Unit Price – Unit Variable Cost) – Fixed Marketing Expenses 5,000,000,000 (Market Demand) x .075 (Market Share) = $375,000,000 (Pounds Share) x (1.75– 1.53) (Unit Contribution) = $82,500,000 (Gross Profit) - $37,200,000 (Marketing Expenses) = $45,300,000 (Net Marketing Contribution) Net Profit = Net Marketing Contribution – Operating Expenses = $45,300,000 - $43,000,000 = $2,300,000 2. a) Market Size = $12,600,000 = Market Sales/Market Revenue Johnson’s competitors hold 65% of the Market Total Market Customers = 238 Dealers Variable Costs = 83% of Sales Marketing Expenses = $2,300,000 Operating Fixed Costs = ($2,300,000/.18) – $2,300,000 = $10,477,778 Johnson’s Market Share = 100% - 65% = 35% Johnson’s Novelty Sales = $12,600,000 x .35 = $5,670,000 Variable Costs = $5,670,000 x .83 = $4,706,100 Net Marketing Contribution = Market Demand x Market Share x (Unit Price – Unit Variable Cost) – Fixed Marketing Expenses $12,600,000 (Market Demand) x .35 (Market Share) = $4,410,000 (Sales Revenue) - ($4,410,000 x .83) (Total Variable Costs) = $749,700 (Gross Profit) -$2,300,000 (Marketing Expenses)
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern