1. A company had the following results last period: Item Value Units Sold 90,000 units Unit Cost $31 Price $80 Advertising $1,500,000 Consumer Promotion $1,700,000 Personal Selling 7 salespeople @ $80,000 each Dealer Promotion $900,000 Product Development $800,000 Using the template below, create a News hoes income statement based on the sales, cost, and expense data provided above. Item Value Note Revenue $ 0 units sold price Cost of Goods Sold $ 0 units sold unit cost Gross Margin $ 0 revenue cost of goods sold Advertising $ 0 expense Consumer Promotion $ 0 expense Personal Selling $ 0 expense Dealer Promotion $ 0 expense Product Development $ 0 expense Total Expenses $ 0 sum of expenses Net Profit $ 0 gross margin total expenses The marketing team was considering various changes in their decisions and wondered what the impact would be on various measures in the Income Statement. Answer the remaining questions in this assignment about different scenarios under consideration.

Based on the sales, cost, and expense data provided, the NewShoes income statement would be as follows:

1. Revenue: \$7,200,000

- Calculated as 90,000 units sold \$80 per unit.

2. Cost of Goods Sold (COGS): \$2,790,000

- Calculated as 90,000 units \$31 unit cost.

3. Gross Margin: \$4,410,000

- Calculated as Revenue ($7,200,000) Cost of Goods Sold ($2,790,000).

4. Advertising Expense: \$1,500,000

5. Consumer Promotion Expense: \$1,700,000

6. Personal Selling Expense: \$560,000

- Calculated as 7 salespeople \$80,000 each.

7. Dealer Promotion Expense: \$900,000

8. Product Development Expense: \$800,000

9. Total Expenses: \$5,460,000

- Sum of all expenses.

10. Net Profit: -\$1,050,000

- Calculated as Gross Margin ($4,410,000) Total Expenses ($5,460,000).

QUESTION

If prices were increased by $10 per unit, but unit sales remained the same, what would the new level of Gross Margin? $

Of Net Proft

QUESTION

the unit cost could be lowered by $10, and unit sales remained the same, what would be the new level of Gross Margin? $

Of Net Profit? $

QUESTION

the marketing team decided to add 3 salespeople and unit sales increased by 8,000 units, what would be the new level of Gross Margin? $

Of Net Profit? $