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A new, vitamin-rich drink called ZAP is an entry in the 21 million 8 oz. can sports drink national market. Because of the lack of marketing funds, management has decided to introduce ZAP only in major cities that account for 65% of the U.S. sports drink market. Advertising costs are estimated at $250,000 and fixed overhead costs are $90,000 per year. The retail price to the consumer for an 8 oz. can will be $.50. Variable costs for the product are $.18/can for material and $.06/can for labor. Retailers will get a margin of 20% off of retail prices and wholeslaers will get 10% off the retailer cost of the item. At what price will the product be sold to wholesalers (manufacturer's selling price)?
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In response to increasing competition, a major paper distributor in the Washington metropolitan area with headquarters in Cheverly, Maryland wants to expand its presence along the east coast. The objective is to have one warehouse facility in a ma..
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