1.

Determine the market potential for a product that has 50 million prospective buyers who purchase an average of 3 per year and price averages $25. How many units must a company sell if it desires a 10 percent share of this market?

2.

Develop a profit-and-loss statement for the Westgate division of North Industire. This division manufactures light fixtures sold to consumers through home improvement and hardware stores. Cost of goods sold represents 40 percent of net sales. Marketing expenses include selling expenses, promotion expenses, and freight. Selling expenses include sales salaries totaling $3 Million per year and sales comissions (5 percent of sales). The company spent $3 million on adertising last year, and freight costs were 10% of sales. Other costs include $2 million for managerial salaries and expenses for the marketing function and another $3 million for indirect overhead allocated to the division.

a. Develop the profit-and-lost statement if net sales were $20 million last year.

b. Develop the profit-and-lost statement if net sales were $40 million last year.

c. Calculate Westgate's break-even sales.

3.

Using the profit-and-loss statement you developed in question 2.2b, and assuming thatWestgate