Reference no: EM132592426

Question - For Part 2, complete the work below. Consult Chapter 10 and the Marketing Math Appendix in the textbook, along with the Week 7 readings and course materials. Note: You must show your work or it will not count. Many resellers and, in particular, retailers discuss their markup not in terms of Markup-on-Cost, but as a reflection of price. That is, the markup is viewed as a percentage of the selling price and not as a percentage of cost, as it is with the Markup-on-Cost method. Determine the following:

1. A clothing store is selling a suit with a $200 markup, which requires a $650 selling price. What is markup percentage based on selling price?

2. Company XYZ is trying to price their shoes based upon selling price. This company's cost per pair of shoes is $98 each, and their markup-on-selling price percentage is 50%. What is the Selling Price for one pair of shoes?

Next, you have been asked by your manager to craft an update on the company's sales and fulfilment performance of your flagship product. Here is the breakdown of how your accounting department allocated the costs for the flagship product:

Variable costs: Packing: $4.00 per sale

UPS (fulfilment charge) charge per sale: $10.00 per sale

Sales Commission: $10.00 per sale

Flagship Units: $30.00 Cost of each

Fixed Costs: Rent: $125,000 per year

Overhead: $700,000

Selling Price: $125.00 per unit

Answer the following:

1. What is the contribution margin per unit for the flagship product?

2. What is the Break-Even Volume in Units for the flagship product?

3. What is the Break-Even in dollars for the flagship product?

4. What would be the net profit if you sold 30,000 units of the flagship product?