Jones Ltd is a 70-year-old company in Wellington, New Zealand which manufacturers a range Products for small and medium size businesses. Currently, the marketing manager is developing the marketing plan for the introduction of a new range of ring fierce competition for distribution space in stationery retail establishments for st products in the New Zealand market. So fierce is the competition that Jones Lid antici spending significant promotional $ to publicize the ne cant promotional $ to publicize the new range of ring binders. Although introduction costs are substantial, the profits are also substantial if the company can secun distribution space. oduction costs for the ring binders are well known. There is a one-time setup cost for the initial production at $75000. Paper printing costs for the front-back covers run about $0.20 per cover. The raw material costs are $3 per ring binder. Each ring binder will sell for $12.50 retail. Of this, the retailer has a 32% margin. Jones Ltd, as do most stationery manufacturers, intends to use a one-tiered distribution system. The ring binders will be distributed direct to wholesaler and stationery chain store distribution centers. These distributors then sell direct to retail stationery stores. The distributor earns $15 per box of ring binders (there are 10 ring binders in a box). Jones Ltd is prepared to promote the introduction of the new ring binders at all trade levels and has allocated $8000 for trade magazine advertising directed wholesalers and stationery chain store distributors. There are trade shows in Auckland, Wellington, Christchurch, Dunedin and Hamilton, which Jones Ltd plans to attend and use special events and point-of-sale materials to get the attention of the major retail stationery stores attending the show. Jones Ltd has allocated $1200 for each trade show. Additionally, a direct-mail campaign on the new ring binders has been developed at a cost of $2.25 each, including mailing cost, which will be sent to an estimated 850 retail stores throughout New Zealand, which carry stationery products. Sales force selling expenses to introduce the ring binders are set at $9000. Salespeople for Jones Ltd call on the wholesalers and stationery chain store distribution centers. As an incentive, a salesperson earns $0.75 for each ring binder sold to the distributors. Question Jones Ltd senior management has established a profit objective of $35000 for the first year. What level of dollar sales (revenue) is required to attain this objective? (25 marks) Jones Ltd is a 70-year-old company in Wellington, New Zealand which manufacturers a range Products for small and medium size businesses. Currently, the marketing manager is developing the marketing plan for the introduction of a new range of ring fierce competition for distribution space in stationery retail establishments for st products in the New Zealand market. So fierce is the competition that Jones Lid antici spending significant promotional $ to publicize the ne cant promotional $ to publicize the new range of ring binders. Although introduction costs are substantial, the profits are also substantial if the company can secun distribution space. oduction costs for the ring binders are well known. There is a one-time setup cost for the initial production at $75000. Paper printing costs for the front-back covers run about $0.20 per cover. The raw material costs are $3 per ring binder. Each ring binder will sell for $12.50 retail. Of this, the retailer has a 32% margin. Jones Ltd, as do most stationery manufacturers, intends to use a one-tiered distribution system. The ring binders will be distributed direct to wholesaler and stationery chain store distribution centers. These distributors then sell direct to retail stationery stores. The distributor earns $15 per box of ring binders (there are 10 ring binders in a box). Jones Ltd is prepared to promote the introduction of the new ring binders at all trade levels and has allocated $8000 for trade magazine advertising directed wholesalers and stationery chain store distributors. There are trade shows in Auckland, Wellington, Christchurch, Dunedin and Hamilton, which Jones Ltd plans to attend and use special events and point-of-sale materials to get the attention of the major retail stationery stores attending the show. Jones Ltd has allocated $1200 for each trade show. Additionally, a direct-mail campaign on the new ring binders has been developed at a cost of $2.25 each, including mailing cost, which will be sent to an estimated 850 retail stores throughout New Zealand, which carry stationery products. Sales force selling expenses to introduce the ring binders are set at $9000. Salespeople for Jones Ltd call on the wholesalers and stationery chain store distribution centers. As an incentive, a salesperson earns $0.75 for each ring binder sold to the distributors. Question Jones Ltd senior management has established a profit objective of $35000 for the first year. What level of dollar sales (revenue) is required to attain this objective? (25 marks)
