Marketing math

Acme is a company that manufactures EcoShine, a consumer product with a retail price of $$10\mathrm{.}95.$ Acme sells

this exclusively to wholesalers who then sell exclusively to retailers. Margins on the product are $10\%$ at the

wholesale level and $18\%$ at the retail level. Variable and fixed costs for the most recent year are as follows:

Fixed costs

Manufacturing: $$2,200,000$

Promotion: $$1,500,000$

Staff: $,$$$800,000$

Variable costs $($per unit$)$

Manufacturing: $$1\mathrm{.}20$

Miscellaneous: $$0\mathrm{.}56$

Sales Commission: $15\%$ of manufacturer's selling price

The most recent annual retail market size was $$250,000,000.$ During that period, Ecoshine held $19\%$ of this

market.

Based on the information above, address the following. Show calculations.

What is Product $x\text{'}$s market share at the breakeven volume? $(4$ points$)$

Construct an annual income statement for Product $x$ for the most recent year. $(4$ points$)$

Marketing is proposing to increase promotional expenses by $70\%$ next year. Assuming all other

considerations remain the same, how many more units need to be sold to maintain the same Operating

Profits from question $2.(2$ points$)$