Margin & Promotional Pricing - V2 This assignment is a replacement assignment for the margin homework you did earlier. If you are not happy with your grade, you may wish to do this assignment. The points you can here will replace the points you camned on the previous assignment (The assignment tab in Canvas for this assignment says zero points: your instructor will take care of adjusting your grade) As before, this assignment is based on the Panopto Video in Module 3. if you didn't do well previously, watch the video again (or for the first time). "Helping other students or sharing answers is not allowed. You are to do your own work. If there is something you don't understand, ask the instructor in class or by email Assignment Mattel is a global supplier of toys, Mattel purchases toy dinosaurs from a manufacturing company called Dragon Toys in China. Mattel then re-sells these dinosaurs to retailers, including Walmart and Target 1. Mattel purchases a Tyrannosaurus Rex dinosaur for $3 from Dragon Toys. Mattel then sells this item for $5 25 to Target What is Mattel's profit in dollars for one T-Rex? a. b. What is Mattel's margin percent for T-Rex? C. Mattel sells 12,200 T-Rex units to Target. How many dollars in profit wil Mattel make from this salo? d. What is the price Mattel would need to charge Target for T-Rex to achieve a 53% margin? 2. Now consider the retailers perspective. Target purchases T-Rex from Mattel for $5.25 and must now determine what to charge their shoppers a. If Target wishes to achieve a 47% target margin, what will their retail price for T-Rex need to be? b. Given the price calculated above, what will Target's gross profit be if they sell 9,750 units of T-Rex? 3. Target is now running a promotion on T-Rex, advertising a retail sale price of $7.42. a. How much "offthe original price calculated in "2a" is the promotional price of $7.42 in dollars? What is the % discount Target can advertise to its customers? b. What will Target's profit be in dollars for one T-Rex at the sale price? c. What will Target's margin percent be on the new sale price? d. At $7.42, how many units does Target have to sell to make the same profit they made at the regular price (which you calculated in "2b")? 4. Walmart also purchases this T-Rex toy item from Mattel and pays the same price as Target pays. a. The Walmart category manager has decided to charge $8.97 for T-Rex. What will Walmart's profit be in dollars on this item? What will their margin be in percent? b. What will Walmart's gross profit be if they sell 8,450 units in a month? C. The Walmart toy buyer has decided $8.97 price point is hurting category profits and is considering raising the price. If the buyer wishes to eam a margin of 45%, what will the new price be? d. At this new price point, what will Walmart's profit be on this item if they sell the same number of units (8,450) as sold in "b" above? 5. One month, the category manager at Walmart runs a one-week sale on T-Rex at $8.97 and sells 15,250 units The price then reverts back to the price calculated in 3c" above for the remaining three weeks. Walmart sells 25,200 units of T-Rex at that higher price. Assume a month has four weeks. For this particular month: a. What will Walmart's total revenue? b. What will Walmart's total profit? C What will the Walmart's average selling price be? d. What will Walmart's margin percent on sales be
