Break even on this additional advertising investment

Assignment Help Operation Management
Reference no: EM131131541

(1) Firm X is considering increasing its advertising budget by $24,000. Firm X generates sales of $10 million per year with an average 15% contribution margin. How much would annual sales have to increase for Firm X to break even on this additional advertising investment?

(2) A retailer buys a widget from a wholesaler for $15 and sells it to a consumer for $20. What is the retailer’s margin? What is the retailer’s markup?

(3) Seasons, Inc. manufactures holiday wreaths and sells them directly to retailers for $5.00. The manufacturer’s cost information is as follows: Variable cost: $3.35/wreath; Advertising and promotion: $300,000; Overhead: $700,000. Calculate the following:

a) Contribution margin for the manufacturer (both in $ and %)

b) Break-even volume in units and dollars

c) Volume in units and dollar sales necessary if Seasons’ profit goal is $500,000

d) Net profit if 6 million wreaths are sold.

Reference no: EM131131541

Questions Cloud

Grocery shop that makes candles offers scented candle : A grocery shop that makes candles offers a scented candle, which can be produced at a rate of 36 boxes per day and used 12 boxes per day. Assume that demand is uniform throughout the year and the shop opens for 360 days. Setup cost is $80 for a run, ..
The sales contract gave the purchaser of the property : Temco, Inc., conveyed to the Wynns certain property adjoining an apartment complex being developed by Sonnett Realty Company. Although nothing to this effect was contained in the deed, the sales contract gave the purchaser of the property use of the ..
What would be the most efficient way to design this ride : Using the First Law of Thermodynamics, what would be the most efficient way to design this ride?
Calculate the expected npv for each alternative : Calculate the expected NPV for each alternative. Explain the decision rules for making a selection between the two alternatives on the basis of the expected NPV.
Break even on this additional advertising investment : Firm X is considering increasing its advertising budget by $24,000. Firm X generates sales of $10 million per year with an average 15% contribution margin. How much would annual sales have to increase for Firm X to break even on this additional adver..
Novelty t-shirts commemorating major sports events : YB Sporting Apparel print up novelty T-shirts commemorating major sports events (e.g. the Super Bowl, the World Series, NCAA championship game, etc.) The T-shirts cost $5 to make and distribute and sell for $20.
Find the average power consumed by the air conditioner : Find the average power consumed by the air conditioner.
Explain the key factors affecting the demand for good : From the scenario for Katrina's Candies, examine the key factors affecting the demand for and the supply of a good in general and Katrina's Candies specifically.
PERT and CPM methods of project scheduling : Review the material in sections 14.5 and 14.6 of your text. These sections provide an overview of the PERT and CPM methods of project scheduling. In addition, watch the second video clip (2514 KB) profiling the construction of the "super bridge" at a..

Reviews

Write a Review

 

Operation Management Questions & Answers

  Two employees perform the same job

Two employees perform the same job, and each received exemplary performance ratings. Is it fair to give one employee a smaller percentage merit because his pay falls within the third quartile

  Potential problems with traditional overhead allocation

Four potential problems with a "traditional" overhead allocation. List and describe four potential problems with a "traditional" overhead allocation system.

  What is the probability that the project tilll take longer

What is the probability that the project tilll take longer than 46 weeks? The project manager wishes to set the due date for the completion of the project so that there is a 90% chance of finishing on schedule. Thus, there would only be a 10% chan..

  Eliminate costly paper catalogs gain the ability

As a result, Unverferth was able to eliminate costly paper catalogs also gain the ability to give up-to-the-minute information to its dealers. This incremental change which was aided by supplier involvement was an example of the approach to innova..

  Describe differences in how mcdonald''s should handle

Describe differences in how McDonald's should handle information and planning for (1) regular food items, (2) nonfood items like wrappers or napkins, and (3) promotional or one-time items like Happy Meal toys.

  Based on the forecast and customer order information

23. (Total 10 points) Based on the forecast and customer order information provided by the company that manufactures the external protection blocks used in the space shuttle, obtain the master production schedule (using the table below - a copy of th..

  Prepare an initial response that will attract the interest

In today's depressed economy, your small consulting company is "scratching" for survival. You have been charged to prepare an initial response that will attract the interest of the company that posted the RFP.

  Calculate the target as function of the deviants decision

Consider a guessing game with N people, and the person closest to 20 plus one-half of the average is awarded the prize, which is split in the event of a tie. The range of guesses is from 0 to 100. Show that 40 is Nash equilibrium. (Hint: Suppose that..

  Market development versus product development

If a company has $1 million to spend on a new strategy and is considering market development versus product development, what determining factors would be most important to consider?

  Required rates of return for the three securities

The expected return for the general market is 12.8 per­cent, and the risk premium in the market is 9.3 percent. Tasaco, LBi\1, and Exxos h,ve bet,s of 0.864, 0.693, and 0.575, respectively. What are the corresponding required rates of return for the ..

  Discuss the characteristics of effective teams

Discuss the characteristics of effective teams? What are the challenges managers face when managing global teams?

  What are possible internal and external changes

What are possible internal and external changes that may require changing the marketing organization design?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd