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# Name May 4 2011 Summary Marketing Arithmetic Problem Answer A1 0 42 Contribution unit by dre13240

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May 4, 2011
Summary
Marketing Arithmetic

A1             \$0.42 Contribution/unit
A2                    Breakeven units (million)
A3                    Breakeven share
A4                    Profit (\$million)
A5                    Contribution after marketing (\$million)
B1                    Breakeven units (million)
B2                    Units required (million)
B3                    Share required
C1                    Breakeven units (million)
C2                    Units required (million)
C3                    Share required
C4                    Share required
D1                  0 Difference in receivables (\$million)
D2                    Increase in inventory (\$million)
E1                    Inventory turn
E2                    Receivables (\$millions)
May 4, 2011
Marketing Arithmetic
Horatio Alger Exercises

Data Input
Problems A1 - A4                                                                                            Problem A2
Retail Price (\$)                             1.00                       Problem A1                                    \$ 000,000
Retail Margin (%)                           33.00                                    Dollars     Fixed Mfg Cost
Wholesale margin (%)                        12.00              Retail Price               1.00   Prod Manager salary
Market size (units, millions)               20.00              Retail margin              0.33   Yearly Advertising
Market share (%)                            24.00                                                Total fixed cost
Variable Mfg cost/unit (\$)                   0.09              Wh'lse price              0.67
Fixed Mfg cost (\$ million)                   0.90              Wh'lse margin             0.08    B. E. (million units)        0.00
Shipping, etc. per unit (\$)                  0.02              Factory price             0.59              Problem A3
Sales Commission (%)                        10.00              Variable cost             0.09    B. E. Market share
Prod manager salary, exp                     0.04              Factory margin            0.50
Problem B1 - B3                                                Shipping, etc             0.02    Problem A4              \$ 000,000
Market size (units, millions)               23.00              Commissions               0.06    Dollar contribution
Advertising budget (\$million)                1.00              Contribution              0.42    Less total fixed cost
Profit
Problem C1 - C4                                                          Problem B1
Retail Margin (%)                           40.00                                 \$ 000,000      Problem A5              \$ 000,000
Wholesale margins (%)                       12.00              Fixed Mfg Cost                    Factory revenu
Prod Manager sal.                 Variable cost
B. E. (mil units)                  Prod manager sal.
Shipping, etc
Problem B2                     Problem B3               Commissions
\$ 000,000                      000,000        Contribu after mkt           0.00
Fixed Mfg cost                 Fixed Mfg cost
Marketing cost                 Marketing cost
Profit requirement             Profit requirement
Total                          Total
Units required                 Units required
Share required                 Share required
Marketing Arithmetic
Horatio Alger Exercises -- continued

Problem C1
\$/unit                      Millions                                   Problem C2
Retail Price                    Factory fixed cost                                                      Millions
Retail Margin                     Marketing cost                                   Factory fixed cost
Total fixed                                 Marketing cost
Wh'lse price                           B.E. units                                  Profit required
Wh'lse margin(.12)                                                                  Total requirement
Factory price                                                                      Units required
Variable cost
Factory margin                                                                              Problem C3
Shipping, etc                                                                      Share required
Commissions
Contribution

Problem C4
Millions
Factory fixed cost
Marketing cost
Profit required
Total requirement
Units required
Share required

See: 123ManagementCases/MarketingArithmetic.xls
May 4, 2011

Data Input                                        Marketing Arithmetic
Problems A1 - A4                                            Horatio Alger Exercises -- continued
Retail Price (\$)
Retail Margin (%)               Problem D1
Wholesale margin (%)
Market size (units, millions)   Demand (units)
Market share (%)                Sales/day (units)
Variable Mfg cost/unit (\$)      Factory price/unit
Fixed Mfg cost (\$ million)      Sales/day (\$)
Shipping, etc. per unit (\$)     Difference (\$)
Sales Commission (%)
Prod manager salary, exp        Problem D2
Problem B1 - B3                 Unit sales/year (\$Mil)
Market size (units, millions)   Mfg variable (\$ Mil)
Advertising budget (\$million)   Sales commis (\$Mil)
Shipping (\$Mil)
Problem C1 - C4                 Fixed manufact (\$Mil)
Retail Margin (%)               Cost of goods (\$Mil)
Wholesale margins (%)           F. G. inventory (\$Mil)
Increase in inv (\$Mil)
Input D & E
Days in receivables
Finished goods inv. turn/yr     Problem E1                                         Problem E2
Market share (%)                Unit Demand (Mil)                                  Demand (mil units)
Unit sales/year (\$ Mil)                            Sales/ day (units)
Variable mfg cost (\$ mil)                          Sales/ day (\$)
Sales comm (\$Mil)                                  Days in receivables
Shipping/unit (\$Mil)                               Receivables (\$)
Fixed manufact (\$Mil)
Cost of Goods (\$Mil)
Avg. Inventory (\$)
Inventory turn
nued

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