Financial_problems1

Financial_problems1 - Financial Management 1 In-Class...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
Financial Management 1 In-Class Problems
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Total sales revenue - total cost of goods sold or $ 200 - $ 100 = $ 100 A s % = (100/200) x 100% = 50% GROSS MARGIN Gross margin (or gross profit) is: On a per-unit basis, unit selling price - unit cost of goods sold. Unit selling price = $ 200/100 = $2 Unit cost of goods sold = $ 100 / 100 = $ 1 Gross margin / gross profit = $2 - $1 = $1
Background image of page 2
TRADE MARGIN Problem: If the consumer retail selling price is $10, what should the manufacturer’s product’s selling price be if the gross margins are known. Unit Selling Price Unit Selling Price Gross Margin as a Percentage of Selling Price Gross Margin as a Percentage of Selling Price Unit Cost of Goods Sold Unit Cost of Goods Sold Marketing Channel Marketing Channel Manufacturer $4.32 $4.80 10.0% Wholesaler $4.80 $6.00 20.0% Retailer $6.00 $10.00 40.0% Consumer $10.00 Green = known variables; Yellow = Answer
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Contribution Margin Example: Unit Selling Price = $10; Unit Variable Costs = $5, Fixed cost =
Background image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 7

Financial_problems1 - Financial Management 1 In-Class...

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online