1 Marketing Managemen t MK323 Marketing Arithmetic Problems Instructions Please prepare the following problems prior to class All work should be on an individual basis You are advised to understand each problem sufficiently to explain how you obtained your answers You should use a simple 4 function calculator on these problems as that is what you are allowed for the exam Part I Arithmetic Exercises 1 Men s socks may be purchased by a retailer for 18 00 per dozen pair If the socks are marked up 80 on cost what will the retail price be per pair 2 The same socks are sold to a different retailer for the same 18 per dozen pair This retailer takes a 60 margin What will be the retail price 3 The retail price of a bracelet is 4 200 00 If the markup on cost is 80 what is the cost of the bracelet to the retailer 2 4 A retailer plans to sell a lamp for 36 00 If the retailer desires to obtain a margin of 28 how much can the retailer pay for the lamp 5 For any given product if the margin is 28 what is the equivalent markup on cost 3 6 For any given product if the markup on cost is 53 what is the equivalent margin Continue to Part II on next page 4 Part I Mini Case You have just been appointed the product manager for the Kick Start brand of scooters in a large consumer products company within the bicycle industry As part of your new job you want to develop an understanding of the financial situation for your product Your brand assistant has provided you with the following facts 99 35 25 Wholesalers Margin a Retail Selling Price b Retailers Margin c Merchandiser Margin 15 d 12 per unit e Direct Factory Labor 8 per unit f Raw Materials g All Factory and Administrative Overheads 525 000 h Salespersons Commissions 12 of manufacturer s selling price i Sales Force Travel Costs 375 000 j Advertising 20 000 000 units k Total market For Scooters l Current yearly sales of Kick Start 4 500 000 units 2 5 million Questions 1 What is the contribution per unit for the Kick Start brand 2 What is the break even volume in units and dollars for Kick Start A merchandiser is an independent firm who represents the manufacturer interests and checks on stocking displays and other merchandising efforts at the retail level
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