Marketing by
the Numbers
fixed costs $20,000,000
Unit cost = variable
cost + —————— = $250 + ————— = $270
unit sales 1,000,000
unit cost $270
Markup price = ———————————
= ——— = $360
(l
- desired return on sales) l - 0.25
b)
ROI
´
investment 0.3 ´
$10,000,000
ROI price = unit cost + ——————
= $270 + ——————
= $273
unit
sales 1,000,000
4.
fixed
cost $20,000,000
Break-even volume = ————————
= ————— = 232,558.1 units
price
-
variable cost $336 -
$250
price
- variable cost $336 - $250
Contribution margin =
———————— = —————— = 0.256 or 25.6%
price
$336
fixed
costs $20,000,000
Break-even sales = ———————— = ——————
= $78,125,000
contribution
margin 0.256
(1)
total
sales – total variable costs
Contribution
margin = ———————————
total
sales
100%
-
74% 1
-
0.74
Contribution margin = —————— = ——— = 1 - 0.74 = 0.26 or 26%
100% 1
2.
fixed
cost +
profit goal $20,000,000 +
$5,000,000
Unit
volume = —————————— = —————————— = 290,697.7 units
price
-
variable cost $336 - $250
Dollar sales =
290,698 units ´
$336 = $97,674,528
or
fixed cost + profit goal
$20,000,000 + $5,000,000
Sales = —————————— =
—————————— = $97,656,250
contribution margin 0.256
fixed cost + profit goal $20,000,000 + $3,000,000
Unit volume = ————————— = —————————— = 267,442 units
price
-
variable cost $336 - $250
Dollar sales = 267,442 units ´ $336 = $89,860,512
or
fixed
cost +
profit goal $20,000,000 +
$3,000,000
Dollar sales = ————————— = —————————— = $89,843,750
contribution margin 0.256
fixed costs
$2,000,000
a.)
Unit cost = variable cost + ——————
= $55 + ————— = $59
unit sales
500,000
unit cost
$59
b.)
Markup price = ————————————— = ——— = $65.56
(l
-
desired return on sales) (l - 0.1)
ROI ´ investment
(0.25 ´
$1,000,000)
c.)
ROI price = unit cost + ———————
= $55 + —————— =
$55.50
unit
sales 500,000
a.) Dollar markup = selling price - cost
= $225 -
$125 = $100
dollar markup $100
b.) Markup
percentage on cost = ——————— = ——— = 0.8 = 80%
cost $125
dollar markup $100
c.)
Markup percentage on price = ——————— = ——— = 0.44
= 44%
price $225
d)
Market demand can be determined as follows:
Q = n ´ q
´ p
where
Q = total market demand
n = number of buyers in the market
q = quantity purchased by an average buyer per year
p = price of an
average unit
5.
fixed
costs $22,000,000
Break-even
sales = ————————— = —————— = $104,761,905
contribution
margin 0.21
4.
gross margin $45,000,000
Gross margin percentage
= —————— = —————— = 0.45 = 45%
net sales $100,000,000
(2)
net profit -$1,000,000
Net profit
percentage = ————— = —————— = -0.01 = -1.0%
net sales
$100,000,000
d)
total
expenses $46,000,000
Operating expense percentage =
—————— = —————— = 0.46 = 46%
net
sales $100,000,000
e)
Inventory
turnover rate (also called stockturn
rate for resellers) is the number of times an inventory turns over or is
sold during a specified time period (often one year).
Teaching
Note: It may be computed on a cost, selling price,
or a unit basis. The formulas are:
Cost of goods sold
Stockturn
rate =
———————————
Average
inventory at cost
or
Selling
price of goods sold
Stockturn
rate =
———————————
Avg.
selling price of inventory
or
Sales
in units
Stockturn
rate =
———————————
Average inventory in units
(1)
net
profit before taxes -$1,000,000
Return on investment = ——————— =
—————— = -.0286
= -2.86%
investment $35,000,000
6.
net
marketing contribution $4,000,000
Marketing ROS = ——————————— =
—————— = 0.04 = 4%
net
sales $100,000,000
(2)
net
marketing contribution $4,000,000
Marketing ROI = ——————————— = —————— = 0.0976 = 9.76%
marketing expenses $41,000,000
(b)
Market share = (50,000,000 buyers ´ 3
units per buyer) ´
0.1 = 15 million units
gross
margin $24,000,000
a.) Gross margin percentage= ——————— = —————— = 60%
net sales
$40,000,000
net
profit $7,000,000
b.) Net profit percentage = ——————— =
—————— = 17.5%
net
sales $40,000,000
total expenses $17,000,000
c.)
Operating expense percentage = ——————— = —————— = 42.5%
net sales $40,000,000
cost of goods sold
d.) Inventory
turnover rate = ———————————
average inventory at cost
$16,000,000 $16,000,000
= ———————————
= —————— = 1.78
($11,000,000 + $7,000,000)/2 $9,000,000
net
profit before taxes $7,000,000
e.) Return on investment = ————————— = —————— = 35%
investment
$20,000,000
f.)
NMC = net sales - cost of goods sold - marketing expenses
where,
marketing expenses
= selling expenses + promotion + freight + managerial salaries and expenses =
$5,000,000 + $3,000,000 + $4,000,000 + $2,000,000 = $14,000,000
so,
NMC = $40,000,000 -
$16,000,000 -
$14,000,000 = $10,000,000
net
marketing contribution $10,000,000
g.)
Marketing ROS = ——————————— = —————— = 25%
net sales
$40,000,000
net
marketing contribution $10,000,000
h.) Marketing ROI = ——————————— = —————— = 71.4%
marketing
expenses $14,000,000
i.) Students’ responses will vary on this
question. However, it should be noted
that these ratios should be compared to previous ratios for the division, other
divisions of the company, competitors, and industry averages.
III.
No comments:
Post a Comment
Your comments...our inspiration ... thanks!