The management of a packaging materials company has decided to change how the company calculates the sales
Question:
(a) For a product with a target price of $500 per unit, calculate a salesperson’s sales credit for selling 10 units of the product at a price of (1) $450 per unit, (2) $500 per unit, and (3) $550 per unit.
(b) What are the effects that this change is likely to cause on the behavior of the sales force? How might these effects be beneficial to the packaging materials company?
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
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a Sales credit TP w x actual price TP x units sold w 1 025 4 Sales credi...View the full answer
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Related Book For 
Pricing Strategies A Marketing approach
ISBN: 978-1412964746
1st edition
Authors: Robert M. Schindler
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