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Marketing by the Numbers Pricey Sheets Many luxury sheets cost less than $200 to make but sell for more than $500 in retail stores. Some
Marketing by the Numbers Pricey Sheets Many luxury sheets cost less than $200 to make but sell for more than $500 in retail stores. Some cost even moreconsumers pay almost $3,000 for Frett'e "Tangeri Pizzo" kingsize luxury linens. The creators of a new brand of luxury linens, called Boll \& Branch, have entered this market and are determining the price at which to sell their sheets directly to consumers online. They want to price their sheets lower than most brands but still want to earn an adequate margin on sales. The sheets come in a luxurious box that can be reused to store lingerie, jewelry, or other keepsakes. The Boll \& Branch brand touts fair-trade practices when sourcing its high-grade long-staple organic cotton from India. Given the cost information below, refer to Appendix 2: Marketing by the Numbers to answer the following questions. 10-13Giventhecostperking-sizesheetsetaboveandassumingthemanufacturerhastotalfixedcostsof$500,000andestimatesfirstyearsaleswillbe50,000sets,determinethepricetoconsumersifthecom-panydesiresa40percentmarginonsales.(AACSB:Communication;AnalyticalReasoning)10-14Ifthecompanydecidestosellthroughretailersin-steadofdirectlytoconsumersonline,tomaintaintheconsumerpriceyoucalculatedinthepreviousquestion,atwhatpricemustitselltheproducttoawholesalerwhothensellsittoretailers?Assumewholesalersdesirea10percentmarginandretail-ersgeta20percentmargin,bothbasedontheirrespectivesellingprices.(AACSB:Communication;AnalyticalReasoning)
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