COB
problems 1-4

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

• 4

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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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• Fall '08
• STAFF
• marketing management exercise

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