Homework # 5

Homework # 5 - BCOR 2400 4/3/08 Homework # 5 1. Cost $1.53...

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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
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Homework # 5 - BCOR 2400 4/3/08 Homework # 5 1. Cost $1.53...

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