Given the above information in Q1, Shannon's wants to increase its sales to retailers by 20%...

Transcribed Image Text:

Given the above information in Q1, Shannon's wants to increase its sales to retailers by 20% in the next year. Management estimates that the incremental promotion program required to generate sufficient demand to boost sales by 20% will be: Personal Selling Costs 60,000 (exclusive of commission) Consumer Advertising 56,150 Trade Promotion $ 39,462 Sales Promotion $ 25,000 Shannon's will need to hire an additional salesperson (paid a salary and commission) and provide some added administrative support. The salesperson's salary plus administrative support will cost about $60,000 per year. The salesperson's commission will be the equivalent of $0.05 per six-pack sold. Unit variable costs, exclusive of the salesperson's commission, are the same as in Q1. The incremental costs of consumer advertising, trade promotion, and sales promotion necessary to support sales in the new market will be substantial, as indicated in the table above. How many six-packs must be sold to break even on the incremental costs that are anticipated? Given the above information in Q1, Shannon's wants to increase its sales to retailers by 20% in the next year. Management estimates that the incremental promotion program required to generate sufficient demand to boost sales by 20% will be: Personal Selling Costs 60,000 (exclusive of commission) Consumer Advertising 56,150 Trade Promotion $ 39,462 Sales Promotion $ 25,000 Shannon's will need to hire an additional salesperson (paid a salary and commission) and provide some added administrative support. The salesperson's salary plus administrative support will cost about $60,000 per year. The salesperson's commission will be the equivalent of $0.05 per six-pack sold. Unit variable costs, exclusive of the salesperson's commission, are the same as in Q1. The incremental costs of consumer advertising, trade promotion, and sales promotion necessary to support sales in the new market will be substantial, as indicated in the table above. How many six-packs must be sold to break even on the incremental costs that are anticipated?