Calculate the breakeven price elasticity of demand for each brand. (4 points)

Assume that management has decided to expend $100,000 to promote 1 of the 2 brands in the coming fiscal year (2021). Assuming that management is profit oriented, which brand would you recommend? Carefully explain your logic and identify the assumptions that you make. (2 points)

1...........1.1.1.1.2.1.1.3.1.1.1.4.1.1.1.5.1.1.1.6......... b) Management has suggested a 15% price cut for each brand, KKK & MMM. For each calculation below briefly explain the necessary assumption(s). Fall 2020 MAR 4804 i) Financial/Analytical Question Make Up. You should specifically identify any assumptions that you make and justify the decision(s) made. This FAQ explores some marketing implications of the concept of "price elasticity of demand". Consider the 2 following income statements (limited in detail) of 2 different brands (DEF, XYZ) of the Furton Corporation: Brand "DEF" Brand "XYZ" Calculate the breakeven total number of units sold for each brand; (4 points) Brand DEF -contribution margin per unit: ($1,250,000/2,500)- ($850,000/2,500) = 500-340= $160 -breakeven unit: $125,000/$160= 762.20 Brand XYZ - contribution margin per unit: ($1,000,000/4,250) - (350,000/4 250 235.29-82.36=152.93 -breakeven unit: $175,000/152.93=1,144.31 FY2020 Income Statement FY2020 Income Statement Revenue: $1,250,000.00 $1,000,000.00 Brand DEF require to sell less units to breakeven. No. of units soldyr.: 2,500 4.250 ii) Variable costs: $850,000.00 $350,000.00 Calculate the breakeven price elasticity of demand for each brand. (4 points) Gross Profit $400,000.00 $650,000.00 Attributable Fixed Costs $125,000 $175,000 c) Assume that management has decided to expend $100,000 to promote 1 of the 2 brands in the coming fiscal year (2021). Assuming that management is profit oriented, which brand would you recommend? Carefully explain your logic and identify the assumptions that you make. (2 points) Note: points are in parentheses. a) Calculate the contribution margin ratio (%) for each of the 2 BRANDS. Outline your reasoning. (2 points) Brand DEF contribution margin: $1,250,000-$850,000=$400,000.00 contribution margin ratio: $400,000/$1,250,000=0.32 or 32% Brand XYZ contribution margin: $1,000,000-$350,000= $650,000.00 contribution margin ratio: $650,000/$1,000,000=0.65 or 65% The submission (FAQ Make Up) is due 11:59 PM, Thursday, Dec. 3. (Use an attachment in CANVAS EMAIL. You are to submit on an individual basis. Either type answers in MSWord or scan to a pdf file. Do not ur IRGI Make sure that your namo ir the CILiteolf 1...........1.1.1.1.2.1.1.3.1.1.1.4.1.1.1.5.1.1.1.6......... b) Management has suggested a 15% price cut for each brand, KKK & MMM. For each calculation below briefly explain the necessary assumption(s). Fall 2020 MAR 4804 i) Financial/Analytical Question Make Up. You should specifically identify any assumptions that you make and justify the decision(s) made. This FAQ explores some marketing implications of the concept of "price elasticity of demand". Consider the 2 following income statements (limited in detail) of 2 different brands (DEF, XYZ) of the Furton Corporation: Brand "DEF" Brand "XYZ" Calculate the breakeven total number of units sold for each brand; (4 points) Brand DEF -contribution margin per unit: ($1,250,000/2,500)- ($850,000/2,500) = 500-340= $160 -breakeven unit: $125,000/$160= 762.20 Brand XYZ - contribution margin per unit: ($1,000,000/4,250) - (350,000/4 250 235.29-82.36=152.93 -breakeven unit: $175,000/152.93=1,144.31 FY2020 Income Statement FY2020 Income Statement Revenue: $1,250,000.00 $1,000,000.00 Brand DEF require to sell less units to breakeven. No. of units soldyr.: 2,500 4.250 ii) Variable costs: $850,000.00 $350,000.00 Calculate the breakeven price elasticity of demand for each brand. (4 points) Gross Profit $400,000.00 $650,000.00 Attributable Fixed Costs $125,000 $175,000 c) Assume that management has decided to expend $100,000 to promote 1 of the 2 brands in the coming fiscal year (2021). Assuming that management is profit oriented, which brand would you recommend? Carefully explain your logic and identify the assumptions that you make. (2 points) Note: points are in parentheses. a) Calculate the contribution margin ratio (%) for each of the 2 BRANDS. Outline your reasoning. (2 points) Brand DEF contribution margin: $1,250,000-$850,000=$400,000.00 contribution margin ratio: $400,000/$1,250,000=0.32 or 32% Brand XYZ contribution margin: $1,000,000-$350,000= $650,000.00 contribution margin ratio: $650,000/$1,000,000=0.65 or 65% The submission (FAQ Make Up) is due 11:59 PM, Thursday, Dec. 3. (Use an attachment in CANVAS EMAIL. You are to submit on an individual basis. Either type answers in MSWord or scan to a pdf file. Do not ur IRGI Make sure that your namo ir the CILiteolf