1. Let us continue with the Ariadne brand example. As brand manager you have decided to launch the Ariadne B version of your new product. You have also decided to charge retailers a case price of $29.88 for Ariadne, which will result in it being sold at retail for $3.75 a unit. However, you expect that a substantial amount of the consumer purchasing of Ariadne will be done in major drug store chains like Shoppers Drug Mart. Since these retail operations are large, they can buy in quantity and take advantage of your companys quantity discount policies.

Revise your profit and loss estimate for Ariadne B, assuming that 50% of your brands forecasted sales revenue will be discounted by 5%.

	Ariadne B Original Estimate	Ariadne B Revised Estimate 1	Ariadne B Revised Estimate 2
Estimated Total Annual Sales Volume (cases)	120,000	120,000	120,000
Estimated Price per case ($)	28.00	29.88	$29.88 on 60,000 cases; Discounted case price on

			the remaining 60,000 cases
Total Fixed Costs ($)	750,000	750,000	750,000
Total Average Variable Cost per case ($)	12.50	12.50	12.50

Record your revised financial analysis for Ariadne B in the following chart:

	Ariadne B Original Estimate	Ariadne B Revised Estimate 1	Ariadne B Revised Estimate 2
Sales Revenue ($)	3,360,000	3,585,600
Total Fixed Costs ($)	750,000	750,000	750000
Total Variable Costs ($)	1,500,000	1,500,000	1500000
Net Profit ($)	1,110,000	1,335,600
Profit Margin (%)	33.0	37.2

2. How much has Ariadnes sales revenue been reduced by recognizing that some key retailers will take advantage of your companys quantity discount policies? How much has its net profit been reduced?