OHs_P3_Answers%20to%20Math%20Problem%203

OHs_P3_Answers%20to%20Math%20Problem%203 - MAR 4803 Prof....

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MAR 4803 Prof. Alan Sawyer Assignment #3 Solution to Economic Analysis Problems 1. Margin Structure Retail Price $1.00 - Retail Margin $ 0.33 (33% of $1.00) = Wholesale Price $ 0.67 (price to retailer) - Wholesale Margin $ 0.08 (12% of $0.67) = Manufacturer’s Price $ 0.59 (price to wholesaler) Variable Costs Manufacturing $ 0.090 + Shipping, etc. $ 0.020 + Commissions $ 0.059 (10% of manufacturer's selling price) = Unit Variable Cost $ 0.169 Manufacturers Price $ 0.590 - Unit Variable Cost $ 0.169 = Unit Contribution $ 0.421
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2. Breakeven Breakeven = Total Fixed Costs Unit Contribution Manufacturing $ 900,000 + Advertising $ 500,000 + Product Management $ 35,000 = Total Fixed Cost $1,435,000 Breakeven = $1,435 k = 3,408,551 units per year .421 3. Breakeven Market Share Market Share = Volume Total Units In Market Breakeven Market Share = 3,408,551 = 17% 20 million
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4. Profit Impact if Keep current 24% Market Share Profit Impact = (Unit Volume) x (Unit Contribution) – (Fixed Costs) Volume
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This note was uploaded on 05/12/2010 for the course MAR 5805 taught by Professor Sawyer during the Fall '08 term at University of Florida.

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OHs_P3_Answers%20to%20Math%20Problem%203 - MAR 4803 Prof....

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