problems 1-4 - Financial Aspects of Marketing Management...

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Financial Aspects of Marketing Management Exercise 1 Studio Recordings, Inc. Inout Data Calculations Variable Costs Royalties $1.25 Songwriter $0.35 Artist $1.00 $2.60 Fixed Costs Advertising $275,000.00 $9,000,000 Overhead $250,000.00 -$2,600,000 $525,000.00 $6,400,000 -$525,000 MSRP $9.00 $5,875,000 Units Sold $1,000,000.00 Target Profit $200,000.00 a. SP - VC = C/U $9.00-$2.60 = $6.40 b. BE volume in CD units FC/(C/U) = BE units $575,000/$6.40 = 82,032 units c .Net Profit if 1M CDs sold = Total sales - Total VC - Total FC d . $200,000 profit goal, in units TFC + target profit / (C/U) $525,000+$200,000 / $6.40= 113,282 units
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Financial Aspects of Marketing Management Exercise 2 Video Concepts, Inc. Input Data Calculations Variable Costs Production $4.00 Labels $0.50 $0.50 $5.00 Fixed Costs Distribution $125,000 Label $5,000 Packaging $10,000 Advertising $35,000 $175,000 Est. Market Size 100,000 units Sugg Retail Price $20 per unit Margin 40% a. Contribution per Unit Cost + MU = SP Cost + . 4($20.00) = $20.00 C/U = $12.00 - $5.00 = $7.00 Contribution Margin (Cost - MU) / Cost = CM CM = (12.00 - $5.00)/ $12.00 CM = .58333… c. 2) Modified BE target profit TFC + target profit / (C/U) $175,000 + $30,000 / $7.00 = 29,286 units c. 3) share of market BE target units / Whole market 29,286 / 100,000 = 29.29% b. BE in Units TFC / (C/U) $175,000/$7.00 = 25,000 units BE in dollars BE in units* manu.
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