BUS360DEChptr12Asgnmnt - 2 Based on the volume determined...

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North Carolina State University College of Management BUS 360 Marketing Methods Chapter 12 Assignment Chapter 12: Pricing Concepts for Establishing Value Binbin Shao Bus 360-601 Assignment: A shoe manufacturer has opened a new manufacturing plant. The cost of the plant was an investment of $800,000. The total fixed operating cost is $80,000 per year. The variable cost for materials, labor, distribution, marketing etc is $15 per pair. The maximum manufacturing capacity of the plant is 20,000 pairs of shoes a year. For retail price use the prevailing price for your shoes. 1. What is the volume of sales required for the business to break even each year?
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Unformatted text preview: 2. Based on the volume determined in question 1 how much will the shoes need to sell for to make a 12% profit? 3. How many pairs of shoes would need to be sold and at what price to recover the initial plant investment in five years? Explain your answers and how they were calculated. Number your answers and enter below 1. Fixed cost/contribution per unit 80000/15=5334 2. (80000+12%X i /15=5334 3. I certify that I completed this Chapter exercise without assistance from anyone and that these answers are solely my own work. BUS 360DE Chapter 12 Assignment –Instructor: Weems...
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