The Hardin Balderdash Company has two brands (A & B). Price and cost data for each...
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The Hardin Balderdash Company has two brands ("A" & "B"). Price and cost data for each are presented below. Unit price Unit variable cost Unit volume/year Annual Promotional expense a) "A" $3.75 $4.35 $2.15 $2.05 755,000 units 1,225,000 units $625,000 $675,000 Calculate the contribution margin ($) and contribution margin ratio (%) for each brand at the UNIT level. (6 POINTS) "B" b) c) Given a 20% price cut, estimate the breakeven elasticity of each brand. (4 points) E What are the respective brand contribution margins($) of "A" and "B" to the Hardin Company? if Hardin Company wishes to retain only one of these brands which one would you recommend for retention? Explain your reasoning and state your assumptions! (6 POINTS) "A" d) It has been proposed that the price of each brand be reduced by 15%. Unit variable costs are unchanged. What would be the new unit contribution margin ($) and unit contribution margin ratio (%) for each brand assuming no change in unit variable costs? What percentage increase in each brand's unit sales is necessary to maintain each brand's contribution margin (5) (4 POINTS) The Hardin Balderdash Company has two brands ("A" & "B"). Price and cost data for each are presented below. Unit price Unit variable cost Unit volume/year Annual Promotional expense a) "A" $3.75 $4.35 $2.15 $2.05 755,000 units 1,225,000 units $625,000 $675,000 Calculate the contribution margin ($) and contribution margin ratio (%) for each brand at the UNIT level. (6 POINTS) "B" b) c) Given a 20% price cut, estimate the breakeven elasticity of each brand. (4 points) E What are the respective brand contribution margins($) of "A" and "B" to the Hardin Company? if Hardin Company wishes to retain only one of these brands which one would you recommend for retention? Explain your reasoning and state your assumptions! (6 POINTS) "A" d) It has been proposed that the price of each brand be reduced by 15%. Unit variable costs are unchanged. What would be the new unit contribution margin ($) and unit contribution margin ratio (%) for each brand assuming no change in unit variable costs? What percentage increase in each brand's unit sales is necessary to maintain each brand's contribution margin (5) (4 POINTS)
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Related Book For
Principles of Cost Accounting
ISBN: 978-1305087408
17th edition
Authors: Edward J. Vanderbeck, Maria Mitchell
Posted Date:
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