Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Is anyone can help me to calculate those questions? Hank Alger has just become product manager for Brand K. Brand K is a consumer product

Is anyone can help me to calculate those questions?

Hank Alger has just become product manager for Brand K. Brand K is a consumer product with a retail price of $1.00. Retail margins on the product are 23%, while wholesalers have a 10% mark-up. Variable manufacturing costs for Brand K are $0.10 per unit. Fixed manufacturing costs = $700,000. The advertising budget for Brand K is $500,000.

In 20x1, Brand K and its direct competitors sell a total of 20 million units annually; Brand K has 25% of this market. In 20x1, what is:

The unit contribution for Brand K? $

Brand Ks break even point? (round answer to the nearest thousand) K

Brand Ks profit? (round answer to the nearest thousand) $ K

The market share Brand K needs to break even? %

In 20x2, industry demand is expected to increase to 25 million units per year. Mr. Alger is considering raising his advertising budget to $1 million. Assuming Mr. Algers market share increases to 30% in 20x2 if the advertising budget is raised:

What will be Mr. Algers ROI on his investment? %

Upon reflection, Mr. Alger decides not to increase Brand Ks advertising budget. Instead, he thinks he might hire 2 additional sales reps (combined salary: $200,000). Assuming his market share in 20x2 increases to 28%:

What will be Mr. Algers ROI on his investment? %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance For Growing Enterprises

Authors: Edward W. Davis, Roger Buckland

1st Edition

1138679941, 978-1138679948

More Books

Students also viewed these Finance questions

Question

Prepare a short profile of Lucy Clifford ?

Answered: 1 week ago

Question

Prepare a short profile of Rosa parks?

Answered: 1 week ago

Question

Prepare a short profile of victor marie hugo ?

Answered: 1 week ago

Question

Prepare a short profile of Henry words worth Longfellow?

Answered: 1 week ago