Compute unit cost and markup price
Marketing Management
Question 1- Sanborn, a manufacturer of electric roof vents, realizes a cost of $55 for every unit it produces. Its total fixed costs equal $2 million. If the company manufactures 500,000 units, compute the following:
a. unit cost
b. markup price if the company desires a 10 percent return on sales
c. ROI price if the company desires a 25 percent return on an investment of $1 million
Question 2- An interior decorator purchases items to sell in her store. She purchases a lamp for $125 and sells it for $225. Determine the following:
a. dollar markup
b. markup percentage on cost
c. markup percentage on selling price
Question 3- A Consumer purchases a toaster from a retailer for $60. The retailer% markup is 26 percent, and the wholesaler’s markup is 15 percent, both based on selling price. For what price does the manufacturer sell the product to the wholesaler?
Question 4- A vacuum manufacturer base twat cost of $50 and wishes to achieve a margin of 30 percent based on selling price. If the manufacturer sells directly to a retailer who then adds a set margin of 40 percent based on selling price, determine the retail price charged to consumers.
Question 5- Advanced Electronics manufactures DVDs and sells them directly to retailers who typically sell them for $20. Retailers take a 40 percent margin based on the retail selling price. Advanced’s cost information is as follows:
DVD package and disc $2.50/DVD
Royalties’ $2.25/DVD
Advertising and promotion $500,000
Overhead $200,000
Calculate the following:
a. contribution per unit and contribution margin
b. break-even volume in DVD units and dollars
c. volume in DVD units and dollar sales necessary if Advanced’s profit goal is 20 percent profit on sales
d. net profit if 5 million DVDs are sold.
