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2.2. The Good Company (Good markets ethically sourced beauty and skin care products for pregnant women. The product portfolio consists of a deep nourishing moisturizer.
2.2. The Good Company ("Good markets ethically sourced beauty and skin care products for pregnant women. The product portfolio consists of a deep nourishing moisturizer. Consider the following information: The product sells for $1.50 per sku in the retail market. Good spends $0.50 per bottle in purchase, direct manufacturing and logistics costs (Note: you can assume that these are the only variable costs). In terms of fixed costs, Good spends $50k per month in marketing costs, $20k per month in administrative staff salaries, rent and other costs. Good also has a working capital debt facility, on which, it pays a montly interest of $5k. The depreciation on the machinery amounts to $20k per month. Please calculate the following: 1. Calculate the Variable Costs to Revenue Ratio [1] 2. Calculate the Cash Fixed Costs [1] 3. Calculate the Survival Revenues [2]
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