BUS360RgChptr12Asgnmnt

BUS360RgChptr12Asgnmnt - 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 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? 800,000 = 80,000 + 15x 720,000 = 15x 48000 = x x = volume of shoes 80,000 fix 15 variable
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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? 1).800,000 x .12 2). 896,000-80,000/48,000= 17 a pair of shoe 3. How many pairs of shoes would need to be sold and at what price to recover the initial plant investment in five years? 1). 800,000/5=160,000 2). 160,000-80,000=80,000 3). 48,000/5= 9600 4). 80,000/9600=$8.33 Explain your answers and how they were calculated. Number your answers and enter below 1. BUS 360Rg Chapter 12 Assignment Instructor: Weems I certify that I completed this Chapter exercise without assistance from anyone and that these answers are solely my own work. MIE 480 Student Profile Turn Over...
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This note was uploaded on 11/07/2011 for the course BUS 001 taught by Professor Weem during the Spring '11 term at N.C. State.

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BUS360RgChptr12Asgnmnt - 2. Based on the volume determined...

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