Marketing Math Problems 1. Assume a retailer has fixed costs of $10,000, a unit variable cost...

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Marketing Math Problems 1. Assume a retailer has fixed costs of $10,000, a unit variable cost of $20, and a 50% retail margin. a. How many units must be sold for her to break-even? b. If she has a target profit of $200,000, how many units must she sell to achieve the target profit? 2. The manufacturer of Aromello, a new body lotion, sells it directly to retailers who take a 40% margin. The retail price of Aromello is $5 per bottle. Industry sales for Aromello and other products of its type are 25 million units annually; Aromello has 20% of the market. The manufacturer's fixed costs, including all expenses but advertising, amount to $3 million per year. The annual advertising budget is $2 million. The raw materials of each bottle of Aromello cost 50 cents, while packaging, bottling, and all other variable costs (including shipping, breakage, insurance...) are another 50 cents. a. What is the unit margin of Aromello for the manufacturer? b. What is the break-even volume? c. What is the current volume of Aromello given its market share? Marketing Math Problems 1. Assume a retailer has fixed costs of $10,000, a unit variable cost of $20, and a 50% retail margin. a. How many units must be sold for her to break-even? b. If she has a target profit of $200,000, how many units must she sell to achieve the target profit? 2. The manufacturer of Aromello, a new body lotion, sells it directly to retailers who take a 40% margin. The retail price of Aromello is $5 per bottle. Industry sales for Aromello and other products of its type are 25 million units annually; Aromello has 20% of the market. The manufacturer's fixed costs, including all expenses but advertising, amount to $3 million per year. The annual advertising budget is $2 million. The raw materials of each bottle of Aromello cost 50 cents, while packaging, bottling, and all other variable costs (including shipping, breakage, insurance...) are another 50 cents. a. What is the unit margin of Aromello for the manufacturer? b. What is the break-even volume? c. What is the current volume of Aromello given its market share?

Answer rating: 100% (QA)

1 a The retailer must sell 500 units to breakeven To calculate this we need to use the formula fixed costs retail margin unit variable cost In this ex... View the full answer