Question
I'm looking for help at the very bottom 2.15 and 2.16 I need to know if my answers are right because I'm getting a negative
I'm looking for help at the very bottom 2.15 and 2.16 I need to know if my answers are right because I'm getting a negative answer.
Read the Following Original Case Story
Stark Corp. (manufacturer) manufactures unique shower tiles made from DuPont Corian. Their most popular item is the Tuscan Ridge (TR) tile. The company plans to sell a new tile, the Tuscan Valley (TV) tile, to commemorate their 20th anniversary. The TV tile will be sold to consumers at a suggested retail price of $20 per tile. Stark Corp. will sell the TV tiles to wholesalers, who will then sell the tiles to retailers, who will then sell the tiles to the consumers. The retailers in Stark Corp.s distribution channel earn a gross margin of 50% on their selling price, while wholesalers earn a gross margin of 20% on their selling price. The only unit variable costs for Stark Corp.s TV tile are $2.80 (per unit) for materials and $1.20 (per unit) for labor. Assume Stark Corp. has the cost of advertising which will be $45,000 and other fixed overhead costs which are expected to be $55,000 for the TV tiles.
Based on the image above can you help me answer the following?
Read the Following Added Case Story
The board members of Stark Corp. (manufacturer) have met and decided to conduct an active launching promotion for its new productTuscan Valley (TV) tiles. Stark Corp. decides to use newspapers to promote its TV tile in the introductory year and distribute its TV tile in major metropolitan areas that account for 20% percent of the total U.S. market volume for shower tiles. Newspaper advertising will carry a coupon that will entitle the consumer to receive $8.00 off the price of the first TV tile purchase. The retailers will receive the regular margin and be reimbursed for redeemed coupons by Stark Corp. Past experience indicates that for every ten tiles sold during the introductory year, one coupon will be returned.
Tips for solutions: Consider coupon expenses as discount. See costs items in the original case story first. Unit contribution for Stark Corp. should be changed when you consider coupon expenses.
2.15) What is the Unit contribution ($) for TV tile of Stark Corp. (= manufacturer) with the changed variable costs (due to discount)? (4pts)
2.16) What is the Beak-even volume and Dollar break-even for TV tile of Stark Corp. (= manufacturer) with the changed variable costs (due to discount)? (6pts)
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