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Chapter 2-part continued

Chapter 2-part continued - Financial Aspects of Marketing...

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Unformatted text preview: Financial Aspects of Marketing Management. Contd.. Chapter 2 2-2 Trade Margin (Markup) Suppose a retailer purchases an item for $10 and sells it at $20. Retailer Margin as a percentage of cost is: ($10 / $10) x 100 = 100 % Retailer Margin as a percentage of selling price is: ($10 / $20) x 100 = 50 % 2-3 Trade Margin Unit Cost of Goods Sold Unit Selling Price Gross Margin as a % of Selling Price Manufacturer $2.00 $2.88 30.6% Wholesaler $2.88 $3.60 20.0% Retailer $3.60 $6.00 40.0% Consumer $6.00 2-4 Contribution Analysis Contribution is… The difference between total sales revenue and total variable costs OR on a per-unit basis The difference between unit selling price and unit variable cost 2-5 Break-even point is the unit or dollar sales at which an organization neither makes a profit nor a loss. At the organization’s break-even sales volume: Total Revenue = Total Cost Break-Even Analysis 2-6...
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Chapter 2-part continued - Financial Aspects of Marketing...

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