Answered step by step
Verified Expert Solution
Question
1 Approved Answer
1) Gus is considering selling GuS soda in the U.S. market in 24 bottle party packs with six bottles each of four different flavors. The
1) Gus is considering selling GuS soda in the U.S. market in 24 bottle "party packs" with six bottles each of four different flavors. The intended target segment for this product is consumers who are having cookouts, dinner parties, graduation celebrations, large picnics, and other events with a large number of guests, as well as people who drink a lot of GuS soda and would like a convenient way to easily buy a variety of flavors. Gus would like you to analyze its proposed pricing for this product. Gus has provided you with the following information: - GuS would sell the party packs to beverage wholesalers, who would sell it to retail stores in the United States, who would then sell it to consumers. - GuS expects to earn a 25\% gross margin on cost of goods sold (COGS) for a party-pack. - Beverage wholesalers earn a 20% gross margin on their selling price. - GuS expects retailers in the United States to sell the party packs to consumers for $32.00. At this price, the retailers will earn a 30% gross margin on their COGS. Using this information, GuS has asked you to calculate each of the following five key indicators for each of the three levels of the distribution chain (GuS, the wholesaler, and the retailer). Note that some of this information is already contained above, so you do not need to calculate it. Also, you can assume that the selling price for one partner is the cost of goods sold for the next partner in the distribution chain, so there are no additional transportation or shipping costs. Thus, GuS's selling price is the wholesaler's COGS, and the wholesaler's selling price is the retailer's COGS. Calculate, for each of the three levels of the distribution chain: a) Cost of Goods b) Selling Price c) Gross Margin in Monetary Units (so in U.S. dollars) d) Gross Margin on Cost
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started