Please provide a brief explain on how did you do the calculations. Thanks!

PART 1: GFE is a manufacturer of widgets. They sell their widgets directly to multiple retailers who sell them to end-users (people like you and me).

1. What is the total Marketing and Sales Expense for GFE?
2. What is the current Net Marketing Contribution (NMC) for GFE?
3. What is the current Gross Profit Margin for GFE?
4. What is the current Marketing Return on Sales (ROS) for GFE?
5. What is the current Marketing Return on Investment (ROI) for GFE?
6. What is the Retail Margin?
7. What is the Retail markup percentage?

PART 2: Assume GFE is considering spending $30,000 more on advertising and that they believe they will be able to sell 40,000 more widgets to the retailers as a result of this increased spending on advertising. The MSRP will remain at $10 and GFE will continue to offer the retailers (the trade) a 10% off the list price as a promotion.

1. What will be the new Gross Sales Revenue?
2. What will be the new Trade Promotion total?
3. What will be the new Cost of Goods Sold?
4. What will be the new Marketing and Sales Expense?
5. What will be the new Gross Profit?
6. What will be the new Gross Profit Margin?
7. What will be the new Net Marketing Contribution (NMC)?
8. What will be the new Marketing ROS?
9. What will be the new Marketing ROI?
10. Should they go forward with the plan to increase advertising expenditures? Yes or No

PART 3: A second independent proposal (do NOT consider the information in PART 2 for this question) is for GFE to provide an additional 3% off promotion to the retailers (making the trade promotion 13% instead of 10%). GFE believes they will receive better shelf space allocations from the retailers as a result of this increase in the trade promotion.

1. What percent increase in GFE's manufacturer's gross sales revenue would GFE need in order to have the same Net Profit before taxes ($720,000) as they have now?

DATA

Use the following data to answer the questions about Manufacturing Firm GFE:

Retailers' Sales Revenue from GFE's widgets	$3,000,000
Manufacturer (GFE's) Gross Sales Revenue	$1,800,000
Trade Promotion (10% off)	$180,000
GFE's Net Sales Revenue	$1,620,000
GFE's Cost of Goods Sold (all Variable)	$540,000
GFE's Advertising Expenditure	$50,000
GFE's Sales & Marketing Administration Expenditure	$150,000
GFE's Consumer Promotion Expenditure	$70,000
GFE's Corporate Executive Salary	$70,000
GFE's Research & Development costs	$20,000
GFE's Net Profit before taxes	$720,000
Total Widget Industry Sales at retail	$30,000,000
Manufacturer's (GFE's) Suggested Retail Price/unit	$10.00
GFE's List Price to Retailer	$6.00
Number of Widgets Sold by GFE to retailers	300,000
GFE's ($) Market share	10%

Answer rating: 100% (QA)

GFE Financial Analysis Data Summary Retailers Sales Revenue3000000 Manufacturers Gross Sales Revenue1800000 Trade Promotion 10 off180000 GFEs Net Sale... View the full answer