Question
. (30%) Hearty Snacks Company sells its Paleo-Popcorn product to consumers through a distribution channel that consists of distributors (wholesalers) and retailers. The company has
. (30%) Hearty Snacks Company sells its Paleo-Popcorn product to consumers through a distribution channel that consists of distributors (wholesalers) and retailers. The company has decided to set a margin of 40% on all its products. Retailers margins in the industry are typically 40%, and distributors margins average 25%. The company wants the retail price of the product to be $20. Answer the questions below.
(a) Given the information provided, fill in the missing numbers in the price chain below, including (as the last step) Hearty Snacks cost:
Retailers price to consumers ($) | $20.00 |
Retailers margin (%) (Retailer SP- Retailer cost) | 40% |
Retailers margin ($) Retailer SP- Retailer cost | 20-14.29 = $5.71 |
Retailers cost ($) | 20/1.40 = $14.29 |
Distributors price to retailers ($) | $14.29 |
Distributors margin (%) | 25% |
Distributors margin ($) | 14.29-11.43= $2.86 |
Distributors cost ($) | 14.29 / 1.25 = $11.43 |
Hearty Snacks price to distributors ($) | $11.43 |
Hearty Snacks margin (%) | 40% |
Hearty Snacks margin ($) | 11.43 8.16 = $3.27 |
Hearty Snacks cost ($) | 11.40/1.40 = $8.16 |
I AM ASKING FOR PART B PLEASE.
(b) Hearty Snacks advertising agency has proposed a new marketing campaign, and the CEO is considering raising the companys margin to 50% in order to fund the campaign. Assuming that Hearty Snacks cost is what you calculated above, and that the distributor and retailer margins remain the same, fill in the missing numbers below, including (as the last step) the new retailers price to consumers.
Retailers price to consumers ($) | 24 |
Retailers margin (%) | 40% |
Retailers margin ($) |
|
Retailers cost ($) |
|
Distributors price to retailers ($) |
|
Distributors margin (%) |
|
Distributors margin ($) |
|
Distributors cost ($) |
|
Hearty Snacks price to distributors ($) |
|
Hearty Snacks margin (%) | 50% |
Hearty Snacks margin ($) |
|
Hearty Snacks cost ($) |
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