Gracie Glynn has just become a product manager for Whoyser Products, Inc. and in charge of their new low cost pencil sharpener: the sharpener,

will have a retail price of $1.00. Retail margins on the sharpener are 33% and wholesalers take a 12% margin

Whoyser and its sharpener competitors sell a total of 20 million unit annually

Whoyser has a 24% unit market share of the market

Whoyser variable manufacturing costs for its sharpener are $0.09/unit. Fixed manufacturing costs are $900,000

The advertising budget for the Whoyser sharpener is $500,000. Manager salary and expenses total $35,000

Whoyser salespeople are paid entirely by a 10% variable commission on Whoyser sales revenue. Shipping costs, breakage, etc. amount to $0.02 per unit.

1.What is the unit contribution for the Whoyser sharpener?

2. What is the Whoyser sharpener's Break Even point?

3. What unit market share does Whoyser need to break even?

4. What is Whoyser's profit impact at its current unit market share?

5. Industry demand is projected to increase to 23 million units next year. Gracie is considering raisingher advertising expenditures to $1,000,000. If the advertising budget is raised, how many units will Whoyser have to sell to break even?

6.How many units will Whoyser have to sell in order for it to achieve the same profit impact as it did this year? What will its market share have to be in order for its profit impact to be the same as this year?

Answer rating: 100% (QA)

1 Unit contribution for the Whoyser sharpener Unit contribution Selling price Variable costs 100 009 ... View the full answer