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Metrics Mastery Worksheets are designed to be in the lecture exercises that your college students can work upon in class. This really is a master document that provides all worksheets questions and answers. You can modify or change it because needed to be able to prepare one particular page two sided physical exercises for your college students to hand out in class.

You may also easily convert the answers into powerpoint slides to examine the answers in class. Table of Material Worksheet: Metric 1 Expenditure Types2 Worksheet: Metric a couple of Percentage Change5 Worksheet: Metric 3 Business , Industry Analytics8 Worksheet: Metric some Contribution Margin11

Worksheet: Metric 5 Mark-up , Margin14 Worksheet: Metric 6 Charges Wholesale to Retail17 Worksheet: Metric 7 Break-Even20 Worksheet: Metric eight Return about Marketing Expenditure (ROMI)23 Worksheet: Metric 1 Expense Types 1) The Comfy Seat Company makes reclining seats at its plant and sells them entirely through its retail store. It has the following expenditures: Plant rent and income taxes = $12, 000. 00 Office and management expenditures = $220, 000. 00 Machinery and equipment acquired = $100, 000. 00 Direct materials = $27. 00/chair Immediate labour sama dengan 4 hours/chair @ $14. 00/hour Transport = $5. 0/chair Commercial store front device purchase sama dengan $500, 000. 00 Marketing costs sama dengan $100, 000. 00 Revenue staff income before commissions = $250, 000. 00 Commission = $12. 00/chair a) Discover the Comfy Chair Industry’s variable costs. b) What is the total expense to produce then sell each lying chair? c) Identify the Comfy Chair Company’s set costs. d) What are the whole fixed costs? e) Discover the one-time fixed costs incurred by Comfy Chair Company. f) What are the overall one-time set costs? Response: (a)Direct components = $27. 00/chair Immediate labour = 4 hours/chair @ $14. 0/hour Transportation = $5. 00/chair Commission rate = $12. 00/chair (b)$100. 00/chair (c)Plant rent and taxes = $12, 1000. 00 Office and managing expenses = $220, 000. 00 Promoting costs sama dengan $100, 1000. 00 Product sales staff salary = $250, 000. 00 (d)$582, 500. 00 (e)Machinery and gear purchased sama dengan $100, 500. 00 Industrial store front unit = $500, 000. 00 (f)$600, 500. 00 2) Thompson Toiletries, Inc. is rolling out an addition to its mens’ cologne range tentatively top quality Ode d’Toad Cologne. That costs forty five cents to make each 60mL bottle, and heavy advertising expenditures in the first 12 months would cost $900, 000.

Ode d’Toad Cologne is priced at $7. 50 for a 60mL bottle. a) What is the variable price per unit to produce a jar of Psaume d’Toad? b) What are the overall fixed costs to produce promote Ode d’Toad? Answer: (a)Variable cost every unit sama dengan $0. forty-five (b)Total set costs sama dengan $900, 500 3) Executives of Significant Recordings Limited. produced a great album titled Sunshine/Moonshine by the Starshine Siblings Band. The price and cost information was as follows: |Album cover |$1. 00 | |Songwriter’s royalties |$0. zero | |Recording artist’s royalties |$0. 70 | |Direct material and labour costs to produce each album |$1. 00 | |Cost of manufacturing the project (studio cost, advertising, promotional|$100, 000. 00 | |expenses, etc) | | |Selling price |$7. 00 | ) Discover the adjustable costs, and amounts, that go into generating each project b) Determine the fixed costs, and amount, pertaining to producing the album Answer: a) Varying costs: Album cover$1. 00 Songwriter’s royalties$0. 30 Saving artist’s royalties$0. 70 Immediate material and labout$1. 00 Total Variable Cost every Unit$3. 00 b) Fixed costs: Expense of producing the album = Total Fixed Costs sama dengan $100, 500. 00 4) You will be the owner of a travel agency that sells excursions to university learners. You are creating a package to offer an over night trip to Green Mountain. Identify the fixed and varying costs associated with the package ased on the data below. Following identifying the expenses, calculate the total cost based upon 3 complete busses of students. The package will include ski lift up tickets, entry to a VIP party and one nights hotel accommodation. It will cost you $300 to print 1, 500 full colour posters and another $400 to purchase get together supplies for the VIP Party. Each room costs $80 per night, with several people per room. A bus holds 40 people and the tour bus company charge you $250 per coach. The ski hill is offering you an interest rate of 20 dollars per skiing lift pass. You also know that you need to purchase a? page ad in the campus paper in a cost of $100 per week for 6 weeks. Varying Costs |Total |Fixed Costs |Total | |(description , Unit Cost) | |(Description) | | |Busses ($500/bus) |$1500 |Posters |$300 | |Hotel Areas ($80/room) |$2400 |Party Products |$400 | |Ski lift passes ($20/pass) |$2400 |Newspaper ad ($100/wk) |$600 | | | | | | | | | | | | | | | | |Total Variable Costs |$6300 |Total Fixed Costs |$1300 | Worksheet: Metric 2 Percentage Change 1) Ed’s is actually a small deli, which has experienced great success in its second year of operation. Earnings in Season 2 will be $570, 1000, compared with $380, 000 in Year 1 . What is Ed’s year-over-year product sales growth rate? Answer: Year-over-Year Sales Progress = (Year 2 ” Year 1) / Year 1 5. 100% = ($570, 1000 , $380, 000) / $380, 500 * 100% = fifty percent 2) Bluejeans that normally sells for $75 can be marked down thirty percent and then reduced at the cash register another 10%?

Is this a total reduction of 40%? In the event not, precisely what is the percent reduction? Response: Let Cost 1 become the initial price of $75, let Cost 2 end up being the price after the 30% tag down, and Price three or more be the cost after additional 10% lowering at the cash register. Initial Lowering = -30% = (Price 2 ” Price 1) / Value 1 -0. 3 sama dengan (Price 2 , $75) / $75 -0. 3 * $75 = Value 2 , $75 Cost 2 = -0. 3 * $75 + $75 = $52. 50 Second Reduction sama dengan -10% = (Price three or more ” Price 2) / Price a couple of -0. you = (Price 3 , $52. 50) / $52. 50 -0. 1 5. $52. 50 = Cost 3 , $52. 60 Price several = -0. 1 * $52. 60 + $52. 50 sama dengan $47. 25 Total Percent Reduction = (Price 3 ” Selling price 1) / Price one particular * totally = ($47. 5 , $75) / $75 2. 100% sama dengan 37% 3) A small keep chain content impressive percentage growth figures, moving by $58 mil to $107 million in sales from one year to another. Despite this powerful growth, yet , analysts solid doubt around the firm’s business design, warning that its existing stores’ progress measure suggests that its strategy is faltering. Based on the chart listed below, and let’s assume that stores had been opened around the first day time of Years 1 and 2: Precisely what is the price tag chain’s year-over-year sales growth rate? What is the year-over-year sales expansion or decrease for each store, as appropriate? What is the same store (existing and not expansion) year-over-year expansion? Store |Opened |Revenue Yr 1 (millions) |Revenue Year 2 (millions) | |A |Year you |$10 |$9 | |B |Year you |$19 |$20 | |C |Year one particular |$20 |$15 | |D |Year you |$9 |$11 | |E |Year two |n/a |$15 | |F |Year 2 |n/a |$12 | |G |Year a couple of |n/a |$7 | |H |Year a couple of |n/a |$18 | | | |$58 |$107 | Answer:

Chain-wide Year-over-Year Product sales Growth = (Year 2 ” Yr 1) / Year one particular * fully = ($107 , $58) / $58 = 84. 5% Shop A Year-over-Year Sales = (Year two ” Yr 1) / Year 1 * completely = ($9 , $10) / $12 = -10% Store N Year-over-Year Product sales = (Year 2 ” Year 1) / Yr 1 5. 100% = ($20 , $19) / $19 = 5. 26% Store C Year-over-Year Product sales = (Year 2 ” Year 1) / Yr 1 * 100% = ($15 , $20) as well as $20 sama dengan -25% Shop D Year-over-Year Sales sama dengan (Year 2 ” Year 1) as well as Year one particular * totally = ($11 , $9) / $9 = 22. 22% Same Store Revenue Year you = $10 + $19 + 20 dollars + $9 = $58 million Same Store Revenue Year 2 = $9 + $20 + $15 + $11 = $55 million Same Store Year-over-Year Growth sama dengan (Year 2 ” Yr 1) as well as Year you * totally = ($55 , $58) / $58 = , 5. 17% ) Do you really agree with the analysts’ situation regarding the selling chain in question 3, why or perhaps you should? If you were who owns the price tag chain might you continue to wide open stores? In the event not what would you carry out? Answer: , Agree with the analysts. Existing stores product sales decreased from Year one particular to Season 2, progress declined 5. 17%. , I would not really continue to open up stores. I would address the decline in revenue / find out how come the stores have negative progress in season 2 . Worksheet: Metric 3 Market Share , Market Analytics Use the industry overview below to answer the questions that follow: Mobile Phones in america The mobile phone market in the usa covers the sales of mobile phone equipment, smart phones, and PDAs (personal digital assistants).

Table By below offers the annual revenue volume of mobile phones from 2005 to 2009. Table TWENTY details the industry share in the top handset manufacturers. Desk 1: US Mobile Phones: Sales Volume , Value 2004-2009 | |2004 |2005 |2006 |2007 |2008 |2009 | |’000 units |66, 556. 1 |87, 543. 1 |110, 228. 1 |120, 629. 4 |130, 309. 9 |134, 673. your five | |US$ bn |4. 1 |5. 4 |6. 9 |8. 3 |10. 1 |10. 6 | Table a couple of: Mobile Phones Organization Shares 2005-2009 % full revenue share |2005 |2006 |2007 |2008 |2009 | |Samsung America Inc |15. 7 |15. 1 |17. 3 |22. 1 |25. 4 | |L. G. Electronics USA |15. being unfaithful |16. a few |15. two |20. 6th |21. 5 | |Motorola Inc |30. 4 |34. 8 |33. 5 |22. 8 |16. 4 | |Kyocera Worldwide Inc |5. 4 |4. 9 |4. 0 |9. 2 |9. 9 | |Research in Motion Limited |0. six |1. 1 |2. |6. 0 |9. 0 | |Apple Inc |- |- |- |4. 9 |7. 4 | |Nokia Usa |15. some |18. 1 |12. a few |7. a few |6. your five | |Sanyo North America Corp |4. several |4. a couple of |4. a few |- |- | |Apple Computer Incorporation |- |- |1. 4 |- |- | |Others |12. 1 |5. |9. 0 |6. 9 |3. 8 | |Total |100. 0 |100. 0 |100. 0 |100. 0 |100. 0 | 1) Precisely what is the annual 2009 revenue in us dollars of the leading 4 cellular phone companies? Answer: Revenue Business (%) sama dengan Revenue ($) / Total Market Product sales Revenue ($) Revenue ($) = Revenue Market Share (%) * Total Market Revenue Revenue ($) Samsung America Inc: Income = twenty-five. 4% * $10. six billion sama dengan 0. 254 * $10. 6 billion dollars = $2. 6924 billion dollars L. G. Electronics UNITED STATES: Revenue sama dengan 21. 5% * $10,50. 6 billion dollars = zero. 215 * $10. six billion sama dengan $2. 279 billion

Motorola Inc: Revenue = of sixteen. 4% 2. $10. 6th billion = 0. 164 * $10. 6 billion = $1. 7384 billion Kyocera International Inc: Income = being unfaithful. 9% * $10. 6 billion sama dengan 0. 099 * $10,50. 6 billion = $1. 0494 billion dollars 2) If the performance of the US cellphone market is likely to continue to increase from 2009 to 2012 at a rate of 5% annually, what will how big the market always be by the end of 2012? Answer: Revenue 2009 = $10. 6 billion dollars Revenue 2010 = Income 2009 + 5% 5. Revenue 2009 = $10,50. 6 billion dollars + zero. 05 5. $10. 6th billion = $10. six billion & $0. 53 billion sama dengan $ 14. 13 billion dollars Revenue 2011 = Income 2010 + 5% 5. Revenue 2010 = $11. 13 billion dollars + 0. 05 5. $11. 13 billion = $11. three or more billion & $0. 5565 billion = $11. 6865 billion Income 2012 sama dengan Revenue 2011 + 5% * Income 2011 sama dengan $11. 6865 billion + 0. 05 * $11. 6865 billion dollars = $11. 6865 billion + $0. 584325 billion dollars = $12. 270825 billion = $12. 271 billion dollars 3) Huge retail organizations form a respected distribution route in the US mobile phone market, accounting for 28% of the total value in 2009. In comparison, wi-fi service providers are the cause of 23%, impartial retailers 15%, and other resources account for 32%. Based on the 2009 revenues for the cellular phone market in the usa, what is the share of revenue in dollars for every single of the several distribution channels? Answer:

Earnings Market Share (%) = Revenue ($) as well as Total Industry Sales Revenue ($) Earnings ($) sama dengan Revenue Business (%) * Total Marketplace Sales Income ($) Huge Retail Organizations: Revenue sama dengan 28% 5. $10. six billion = 0. twenty-eight * $12. 6 billion dollars = $2. 968 billion dollars Wireless Service Providers: Revenue = 23% 5. $10. 6th billion = 0. 3 * $10. 6 billion dollars = $2. 438 billion Independent Retailers: Revenue sama dengan 15% 5. $10. 6 billion sama dengan 0. 15 * $10,50. 6 billion = $1. 590 billion dollars Other: Revenue = 32% * $10,50. 6 billion = 0. 32 2. $10. six billion sama dengan $3. 392 billion 4) Calculate the Three Firm Attention Ratio and the Herfindahl Index for america Mobile Phone industry (using 2009 market share values).

What can you infer about the industry concentration by these two metrics? Answer: 3 Firm Attentiveness Ratio sama dengan 25. 4% + 21 years old. 5% + 16. 4% = 63. 3% Herfindahl Index = Sum ([market share)(2] sama dengan Sum (. 254(2 &. 215(2 &. 164(2 &. 099(2 &. 090(2 +. 074(2 +. 065(2 &. 038(2) = 0. 167 With the top rated 3 corporations accounting for 63. 3% of the market and a Herfindahl Index of zero. 167 the marketplace is not highly targeted. 5) You may have just end up being the Director of Retail Revenue for a huge US full chain. What impact will the growing revenue of mobile phones have on your own business? Solution: , With a 5% increase per year, impact will be slight. Large retail chains offer thousands of items. There will likely be considered a similar increase in related goods, such as chargers, skins, situations, travel rechargers, prepaid phone cards, etc . , There may be a need to increase products on hand levels and shelf space devoted to cell phones and related products , There may be a slight increase in buyer flow in to stores, which in turn would affect cross and upselling additional products to consumers strolling in for mobile phones. Worksheet: Metric 4 Contribution Margin 1) Mohan, an artist, takes in caricatures for the waterfront pier. It costs him approximately $5 in materials (paper and markers) for each prêt he makes. He offers each caricature for 20 dollars. Calculate the contribution margin in terms of dollars and percent. Answer: Contribution Margin ($) = Revenue ” COGS = 20 dollars , $5 = $15

Contribution Perimeter (%) sama dengan [Contribution per Product ($) as well as Sale Cost per Device ($)] * fully = [(Sale Value per Unit ” Variable Cost every Unit) as well as Sale Value per Unit] *100% = [($20 , $5) as well as $20] * 100% = [$15 as well as $20] * totally = 0. 75 2. 100% = 75% 2) The Hotel Grill Bar sells a set lunch break for $12. The food expense of sales used in producing each set lunch is definitely $5. Extra variable costs are $3 per lunch. The fixed costs with the restaurant happen to be $3 per meal. Precisely what is the contribution margin portrayed in us dollars and percent? Variable Bills = $5 + $3 = $8 Contribution Margin ($) = Revenue ” Variable Expense = $12 , $8 = $4

Contribution Margin (%) sama dengan [Contribution per Device ($) / Sale Value per Device ($)] * completely = [(Sale Price per Unit ” Adjustable Cost every Unit) / Sale Selling price per Unit] 5. 100% = [($12 , $8) / $12] 5. 100% sama dengan $4 as well as $12 5. 100% sama dengan 0. thirty-three * totally = thirty-three. 3% 3) You invariably is an online retailer of Cd albums, promoting product sales via a ‘no postage and packaging’ present. You purchase your CDs coming from record companies for $18. 75. Product packaging and a padded envelope cost $1. 00 per CD, and postage is usually $2. 00. If you sell off the Compact disks for $25 what is your contribution margin in dollars and percent? Adjustable Expenses = $18. seventy five + $1. 00 + $2. 00 = $21. 75

Contribution Margin ($) = Revenue ” Variable Expense sama dengan $25 , $21. seventy five = $3. 25 Contribution Margin (%) = [Contribution every Unit ($) / Sale Price per Unit ($)] 5. 100% = [(Sale Price every Unit ” Variable Price per Unit) / Sales Price every Unit] * 100% = [($25 , $21. 75) / $25] 2. 100% = [$3. 25 / $25] * totally = 0. 13 2. 100% sama dengan 13% 4) You are the owner of the exclusive nightclub that is taking into consideration holding a New Year’s Eve party. You could have determined that you might want a minimum contribution margin of 40% in order to turn a profit for a single nighttime event at your club.

In addition , in hosting all-you-can-eat and all-you-can-drink occasions in the past, solutions the food value is $20 per head and the refreshment cost is $17 per person. Finally, the house music group charges a fee of $5 per person in attendance. What should you impose for a admission? Answer: Variable Expenses sama dengan Food & Beverage + Band sama dengan $20 + $17 + $5 = $42 Contribution Margin (%) = [Contribution every Unit ($) / Deal Price every Unit ($)]* 100% = [(Sale Price per Unit ” Adjustable Cost per Unit) / Sale Cost per Unit] 2. 100% 40% = [(Sale Value per Product , $42) / Deal Price every Unit] * 100% 0. 0 * Sales Price every Unit = Sale Price per Device , $42 $42 = Sale Cost per Unit ” zero. 4 * Sale Value per Product $42 sama dengan (1 ” 0. 4) * Deal Price Every Unit Sales Price every Unit = $42 / 0. six Sale Value per Device = $70 5) While the owner of the nightclub showcased 4, you learn that a adjoining nightclub is usually selling tickets for their Fresh Year’s Event party in $60/ticket, which is making your event significantly less attractive. In the event you lower your ticket price to match their own given the variable costs in question four and understanding that your fixed costs will probably be $20/person? In the event not, why not and what might you do to increase entry pass sales? Answer: No . The nightclub will lose $2 per admission sold if they matched the neighbouring club’s price.

To increase sales: , Lessen ticket price and minimize variable costs (lower priced food, beverage, band) , Ensure that function is differentiated in a way that justifies the high grade ticket price , Perhaps the other club is not giving all-you-can-eat or all-you-can-drink, or maybe the band can be not as famous, if that’s the case, keep your potential customers know about the differences Worksheet: Metric 5 Mark-up , Margin 1) A computer software program retailer runs on the markup level of 40%. If the retailer pays $25 each pertaining to computer games sold in its stores, how much do the games sell for? Answer: The markup is 40% in the $25 expense, so the markup is: (0. 0) 5. ($25) sama dengan $10 Then the selling price, staying the cost additionally markup, is: $25 & $10 sama dengan $35 Therefore the games cost $35. 2) A golfing pro store pays its wholesaler $40 for a specific club, and after that sells that club to golfers pertaining to $75. What is the selling markup rate? Answer: The gross income in us dollars is determined as product sales price significantly less cost: $75 , $40 = $35 The markup rate is then calculated: Markup (%) sama dengan Gross Revenue / Price *100 = $35 / $40 *100 = 87. 5% 3) A footwear store works on the 40% markup on cost. Find the expense of a pair of shoes that offers for $63. Answer: The price tag on the shoes is definitely calculated the following: Selling Price sama dengan Cost & Markup ($) Cost + (Markup (%) * Cost) $63 = Cost + (40% * Cost) $63 = Expense + (0. 4 5. Cost) $63 = (1 + zero. 4) 5. Cost $63 = 1 . 4 5. Cost Price = $63 / 1 . 4 = $45 4) In 2009, Donna Manufacturing offered 100, 000 widgets intended for $5 every, with a cost of goods marketed of $2. What is the company’s margin? Determine a way that Donna Manufacturing can increase its revenue margin? Response: First we need to calculate the gross income: Gross Earnings = Selling Price ” Cost of Goods Marketed = $5 , $2 = $3 Now we can calculate the margin: Perimeter (%) sama dengan Gross Income / Sales * 95 = $3 / $5 * 95 = 60% Ways to increase the profit margin: , Reduce cost of materials , Lower cost of manufacturing Increase sales price every unit , Decrease COGS 5) If a product costs $100 and is sold with a 25% markup at a retail store, what would be the retailer’s margin for the product? What should be the markup and value if the retailer desires a 25% perimeter? Why may possibly the retailer be wanting to increase their perimeter? Answer: a) To calculate the perimeter, we first have to decide the product sales price: Markup ($) sama dengan Markup (%) * Cost = 25% * $100 = $25 Selling Price = Cost + Markup ($) = $22.99 + $25 = $125 Margin (%) = Markup / Cost * 75 = $25 / $125 * 100 = 20% Therefore the retailer’s margin can be 20% when the product is sold at a 25% markup. ) To calculate the markup and selling price at a 25% perimeter: Selling Price sama dengan Cost / (1 ” Margin (%)) = $22.99 / (1 ” 25%) = $22.99 / (1 ” 0. 25) sama dengan $133. thirty-three Markup ($) = Selling Price ” Cost = $133. 33 , $100 = $33. thirty-three Markup (%) = Markup ($) / Cost 5. 100 = $33. thirty-three / $22.99 * 75 = 33. 33% For that reason to obtain 25% margins, the item would have to always be sold at $133. 33 having a markup of 33. 33%. c) Reasons for increase consist of: , Embrace fixed costs (rent, duty, commission, salary, etc . ) , Increase in demand and/or decrease in supply , Various other competitors/retailers demand more to get the product as well as the higher margin is a result of raising sales cost to match Worksheet: Metric 6th Pricing From suppliers to Retail ) You are a company of icons that sells your goods to a flower nurseries who subsequently sells straight to retailers. Made a new widget and you know that your competition’s product is yours for $23 in hardware stores. You already know yours is slightly better, and are also pretty sure your product can sell for $27. Assuming a retail perimeter of 33. 3% and a low cost margin of 25%, what is the wholesaler’s selling price, and exactly how much is it possible to sell the widgets to the wholesaler pertaining to? Answer: In the event the suggested retail price in the widget is $27, after that: Wholesaler Value ($) = Retail Selling Price * [1 , Retail Margin (%)] = $27 * (1 ” thirty-three. 3%) $27 * (1 ” 0. 333) sama dengan $18. 00 Manufacturer Value = From suppliers Selling Price 5. [1 , Inexpensive Margin] = $18. 00 2. (1 ” 25%) = $18. 00 * (1 ” 0. 25) = $13. 55 2) Being a small equipment manufacturer, the cost to manufacture and package your coffee maker is $10/unit. You want this kind of to be a money cow, so you decide to sell off the coffee machine to your flower nurseries for $19/unit. You know that the wholesaler’s margin is 25%, and that retailers typically consider 33. 3% margins on small appliances. What will your coffeemaker retail pertaining to rounded to the nearest entire number? Response: Manufacturer Selling Price = Low cost Selling Price 5. [1 , Inexpensive Margin]

Wholesale Selling Price = Company Selling Price / [1 , Low cost Margin] = $19 / (1 ” 25%) = $19 / (1 ” 0. 25) = $25. thirty-three Wholesale Value = Retail Selling Price 2. [1 , Full Margin] Retail Selling Price = Wholesale Selling Price as well as [1 , Full Margin] = $$25. 33 / (1 ” 33. 3%) = $25. 33 / (1 ” 0. 333) = $37. 98 Therefore the coffee maker is going to retail pertaining to $38. 00 3) A bearing manufacturer buys raw materials for $0. 50 per unit, becomes the unprocessed trash into a painting tool bearing, and then sells the bearings to a wholesaler pertaining to $1. 00 per product. The flower nurseries then provides the bearings to suppliers for $2. 00 every unit, and finally consumers get the bearings to get $3. 00 per device.

What is the per product margin in dollars pertaining to the manufacturer, wholesaler and merchant? What is the proportion margin to get the manufacturer, flower nurseries and retailer? What is the per product margin in dollars and percentage perimeter for the entire sequence? Answer: (a) Manufacturer perimeter ($) = $1. 00 , $0. 50 sama dengan $0. 50 Wholesaler margin ($) sama dengan $2. 00 , $1. 00 = $1. 00 Retailer margin ($) = $3. 00 , $2. 00 = $1. 00 (b)Manufacturer perimeter (%) = $0. 40 / $1. 00 2. 100 sama dengan 50% Wholesaler margin (%) = $1. 00 as well as $2. 00 * 100 = 50 percent Retailer margin (%) = $1. 00 / $3. 00 * 100 = 33. 3% (c)Chain margin ($) sama dengan $3. 00 , $0. 50 = $2. 40 Chain perimeter (%) sama dengan $2. 60 / $3. 00 * 100 = 83. 3% 4) If the raw materials cost increases by $0. 5 every unit to get the bearing manufacturer showcased 3, and what will be the retail value charged to consumers in the event that all members in the string maintain the same percent perimeter? What is the effect of the natural material boost to the consumer? Why is it crucial to understand funnel margins and pricing techniques? Answer: (a) Manufacturer perimeter = fifty percent Wholesaler perimeter = 50 percent Retailer perimeter = thirty-three. 3% Raw material cost = $0. 50 & $0. 25 = $0. 75 Maker margin sama dengan (Price ” Cost) as well as Price * 100 60 = (Price , $0. 75) as well as Price *100 0. 5 * Selling price = Selling price , $0. 75 $0. 75 sama dengan Price ” 0. 5 * Cost $0. seventy five = Price (1 ” 0. 5) Price sama dengan $0. seventy five / zero. 5 = $1. 50 Therefore the producer sells the bearings intended for $1. 60 Wholesaler margin = (Price ” Cost) / Selling price * 100 50 = (Price , $1. 0) / Cost *100 zero. 5 2. Price sama dengan Price , $1. 55 $1. 50 = Price ” zero. 5 5. Price $1. 50 sama dengan Price (1 ” zero. 5) Selling price = $1. 50 as well as 0. a few = $3. 00 Hence the wholesaler sells the bearings for $3. 00 Store margin sama dengan (Price ” Cost) / Price 2. 100 thirty-three. 3 sama dengan (Price , $3. 00) / Cost *100 0. 333 5. Price = Price , $3. 00 $3. 00 = Cost ” zero. 333 * Price $3. 00 = Price (1 ” zero. 333) Value = $3. 00 / 0. 667 = $4. 50 Therefore the retailer markets the bearings for $4. 50 (b) The price has increased by $1. 50 towards the consumer (or 50% increase). (c) To judge the effects of price changes within the channel to the end customer. Worksheet: Metric 7 Break-Even ) Apprentice Mousetraps would like to know how various units of its “Magic Mouse Trapper it must offer to break also. The product provides for $20. It costs $5 per unit to make. The company’s set costs will be $30, 500. Answer: Break-Even Volume (#) = Fixed Costs ($) / Contribution per Unit ($) Contribution per Device = Product sales Price every Unit ” Variable Expense per Unit = $20 ” $5 = $15 Break-Even Volume level (#) sama dengan $30, 000 / $15 = a couple of, 000 mousetraps 2) Apprentice Mousetraps would like to know how a large number of dollars’ well worth of its “Deluxe Awesome Mouse Trapper it must offer to break also. The product offers for $40 per product. It costs $10 per unit for making. The company’s set costs are $30, 1000. Answer:

Break-Even Revenue ($) = Set Costs ($) / Contribution Margin (%) Contribution Perimeter (%) sama dengan Contribution every Unit / Selling Price every Unit Contribution per Product ($) = Price every Unit ” Variable Price per Device = $40 , $10,50 = $30 Contribution Perimeter (%) = $30 as well as $40 2. 100 = 75% Break-Even Revenue ($) = $30, 000 as well as 75% sama dengan $40, 000 -OR- Break-Even Revenue ($) = Break-Even Volume (#) * Price per Unit ($) Break-Even Volume (#) = Set Costs ($) / Contribution per Device ($) Contribution per Device = Revenue Price every Unit ” Variable Expense per Device = $40 ” $10 = $30 Break-Even Volume (#) = $30, 1000 / $30 = you, 000 devices Break-Even Earnings ($) = 1, 000 * $40 = $40, 000 3) John’s Garments Store uses three salespeople.

It produces annual product sales of $1,000,000 and the average contribution margin of thirty percent. Rent is usually $50, 500. Each sales rep costs $50, 000 each year in income and rewards. How much will sales have to increase pertaining to John to break even upon hiring an extra salesperson? Answer: If the added fixed expense of a salesperson is definitely $50, 1000 and with an average contribution margin of 30%, then: Break-Even Earnings ($) sama dengan Fixed Costs ($) as well as Contribution Margin (%) sama dengan $50, 500 / 30% = $166, 666. 67 Therefore product sales would have to enhance by $166, 666. 67 for Ruben to break actually on selecting an additional salesperson. 4) A corn player wishes to spot how many bushels of corn he must sell to cover his set cost for a given selling price.

The player has costs consisting of 500 usd in real-estate taxes, $700 interest on the bank loan, and $800 in other fixed expenditures. The varying cost per bushel is definitely $1, and covers time, corn seeds, herbicides and pesticides. If the price per bushel is definitely $2, just how many bushels must this individual sell in order to even? Response: Break-Even Amount (#) = Fixed Costs / Contribution per Unit Fixed Costs = 500 usd + $700 + hundreds of dollars = $2000 Contribution every Unit ($) = Cost ” Adjustable Cost per Unit sama dengan $2 , $1 sama dengan $1 Break-Even Volume (#) = $2000 / $1 = 2150 bushels 5) If the character in question some sells simply enough bushels to break even, what is his annual revenue? Identify 2 different ways the player could boost his twelve-monthly profit.

Response: Farmer’s gross annual profit sama dengan $0. The farmer could increase his profit by: , Growing even more corn , Increasing the retail price he fees per bushel , Minimizing his costs: , Pay off loan or perhaps find decrease interest rate , Reduce labour costs , Find reduced seed costs , Discover lower herbicide and pesticide costs , Changing to a more lucrative harvest , Locate alternative make use of for the land that provides a better go back Worksheet: Metric 8 Return on Advertising Investment (ROMI) 1) A marketer can be evaluating two marketing campaigns. It is estimated that Campaign you would make incremental earnings of $250, 000, at an incremental cost of $50, 1000 and a contribution perimeter of thirty percent.

Campaign a couple of would make incremental earnings of 50 dollars, 000, in a incremental cost of $20, 500 and a contribution perimeter of 50 percent. If the online marketer is basing their decision solely upon ROMI, which will campaign if he or she go ahead with? Answer: ROMI for Campaign 1 is located by: ROMICampaign1 = (Incremental Revenue * Contribution Perimeter ” Cost) / Cost = ($250, 000 5. 30% , $50, 000) / 50 dollars, 000 sama dengan 50% ROMICampaign2 = (Incremental Revenue * Contribution Margin ” Cost) / Expense = ($50, 000 5. 50% , $20, 000) / 20 dollars, 000 = 25% Hence the marketer should select Advertising campaign 1 . 2) A clothing retailer can be considering buying a newspaper advertising campaign to generate more sales.

The campaign is definitely expected to cost $3, 500 in creative agency fees and $9, 1000 in blood circulation costs, when increasing income from $110, 000 to $170, 000. The retailer’s contribution perimeter averages 25%. What could be the return on the marketing expenditure of the newspaper campaign? Response: Incremental Income = $170, 000 , $110, 500 = $60, 000 Advertising Costs sama dengan $3, 500 + $9, 000 = $12, 500 ROMI = (Incremental Earnings * Contribution Margin ” Cost) / Cost sama dengan ($60, 1000 * 25% , $12, 000) / $12, 500 = 25% 3) An alternative solution option for the clothing retailer (in the previous question) is to purchase a direct mail advertising campaign targeting past customers ” only a fraction of the reach of the magazine campaign.

The cost of the direct mail campaign would be $1, 000, but might only bring about increasing earnings to $150, 000. Precisely what is the come back on advertising investment in cases like this? Answer: Incremental Revenue = $150, 500 , $110, 000 = $40, 500 ROMI = (Incremental Earnings * Contribution Margin ” Cost) as well as Cost sama dengan ($40, 500 * 25% , $1, 000) as well as $1, 500 = 900% 4) In case the clothing dealer (in the previous questions) chooses to implement both the paper and normal mail campaign what would be the put together return in marketing investment. Answer: Newspapers Incremental Revenue = $60, 000 Direct Mail Incremental Income = $40, 000 Total Incremental Earnings = $60, 000 + $40, 1000 = $100, 000 Total Cost sama dengan $12, 000 + $1, 000 sama dengan $13, 000

ROMI sama dengan (Incremental Revenue * Contribution Margin ” Cost) / Cost = ($100, 1000 * 25% , $13, 000) / $13, 1000 = ninety two. 31% 5) Which advertising campaign should the clothing retailer in the last questions execute for maximum return upon marketing expense? If the retailer is more concerned with maximizing earnings growth, if he or she execute the newspaper campaign, direct mail plan or the two? Why? Solution: a) Regular mail campaign (900% ROMI) as it is significantly greater compared to the newspaper campaign (25%) and combined delivery (92. 31%). b) Do both while the earnings increase is definitely $100, 500, greater than the $60, 1000 as a result of the newspaper marketing campaign and the $40, 000 resulting from the direct mail campaign.

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Published: 02.11.20

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