MK 5551 Sustainable Marketing Management

Basic Financial Problems for Marketing 1

This is a problem set. Work through them.

1. If we sell 1000 units at $15 per unit, what is our gross revenue?
2. If we sell 1000 units at $15 per unit, but 100 units are returned, what is our net revenue?
3. If we sell 1000 units at $15 per unit and have $5 variable cost per unit, what is our per unit contribution? What was total contribution?
4. If we sell 35,000 units at $9.75 per unit and have $5 variable cost per unit, what is revenue, variable costs, per unit contribution and total contribution?
5. If we sell 5000 units at $12 per unit and have $7 variable cost per unit, what is our revenue, variable costs, per unit contribution and total contribution?
6. Consider the previous problem. Let's say our fixed costs are $35,000. What is our net profit? What is our breakeven point?
7. We sell 1000 units at $15 per unit. Variable costs per unit are $5. Our fixed costs are $6000. What is our breakeven point and how far above that point are we?
8. For the situation in the previous problem, because of supplier changes, we know our variable costs will increase next year to $8 per unit and our fixed costs are increasing by 20%. What is the new breakeven point? How many more units will we have to sell in order to maintain the total profits from the previous problem?
9. We sell 1000 units to wholesalers, who sell these units to distributors, who sell these units to retailers who sell these units to consumers. Consumers are paying $15 per unit. Retailers get a 30% margin, distributors receive a 10% margin, and wholesalers receive a 15% margin. Our variable costs are $4 per unit. What is our price per unit, our contribution per unit and our total contribution?
10. If our selling price is $12 per unit, our variable costs per unit are $8 and our fixed costs are $120,000, then what is our breakeven?
11. In the previous problem, if we wanted to generate $40,000 in profit, how many units would we have to sell?
12. If our selling price is $18 per unit, our variable costs per unit are $10, our fixed costs are $360,000 and we want to generate $200,000 in profit, how many units do we need to sell?
13. In the previous problem, if we find that competitive pricing pressures are going to force us to lower our price to $16 per unit, how many units will we need to sell to breakeven? How many will we need to sell if we want to generate $200,000 in profit?
14. We manufacture thingies. Our variable cost per unit is $10. We markup our price 50% so we can have a contribution margin of 33%. We sell to wholesalers who get a 20% margin. Wholesalers sell to retailers who get a 25% margin. At what price do retailers sell these thingies to consumers? At what price do we sell to the wholesaler?