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# Hw2 ans - BCOR 2400 Pricing Math Exercise Solution Spring 2008 1 What is the unit contribution of Squishy Balls The following are all per unit

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Pricing Math Exercise Solution Spring 2008 1. What is the unit contribution of Squishy Balls? The following are all per unit. Retail Price: \$4.38 Retailer Mark up (on selling price) of 24%: - \$1.05 4.38 * .24 Retailer Cost / Wholesaler Price: \$3.33 4.38 - 1.05 Wholesaler Mark up (on cost) of 13%: - \$0.38 3.33 - 2.95 (from below) = .38 need to do below work first x = wholesaler cost .13x = wholesaler mark-up x + .13x = 3.33 1.13x = 3.33 Wholesaler Cost / Manufacturer Price: \$2.95 x = 3.33 / 1.13 = 2.95 Variable Cost: \$1.36 manufacturing vc \$0.16 shipping, etc. \$0.30 sales comm (10% of 2.95) - \$1.82 \$1.82 total unit variable costs Unit Contribution: \$1.13 2. What is the break even point for Bouncy Balloons? Break Even Quantity = Fixed Costs Unit Price - Unit Variable Cost \$1,598,000 Fixed Costs: \$2.95 - \$1.82 \$834,000 manufacturing \$675,000 advertising \$1,598,000 \$ 89,000 salary \$1.13 (unit contribution) \$1,598,000 total fixed costs Break Even Quantity = 1,414,160 3. What is the market share Bouncy needs to break even? Market Share

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## This note was uploaded on 03/31/2008 for the course BCOR 2400 taught by Professor Rexmoody during the Spring '08 term at Colorado.

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Hw2 ans - BCOR 2400 Pricing Math Exercise Solution Spring 2008 1 What is the unit contribution of Squishy Balls The following are all per unit

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