Question
Name: . A manager of a local clothing retail store wants to make a sales and promotion plan for next month. In order to evaluate
Name: .
A manager of a local clothing retail store wants to make a sales and promotion plan for next month. In order to evaluate the effectiveness of the plan, the manager identifies all the costs and other relevant information and conducts Break-even analysis. Here are the identified costs and other related information.
Monthly rent fees: $2,500
Wages for the hired employees (Monthly): $6,000
Utility fees (Monthly): $700
Other operation costs (Monthly): $1,000
Purchase price per unit: $78 (The manager purchases clothing from other retailers)
Shipping and handling cost per unit: $12
(Assume there is no other cost)
- What is the total Fixed cost per month?
Answer 9000 :
What is the Variable cost per unit?
Answer 90 :
The manager wants to have 20% profit margin on selling price. What is the selling price per unit at the retail store?
Answer : 240 :
How many product units must be sold a month to break even?
Answer 68 :
What is the revenue at the break-even point?
Answer 409.09 :
The manager wants to have total profit of $5,000 a month. How many product units must be sold to achieve this goal?
Answer :
Now the manager considers two marketing promotion options.
Option 1: Advertising on a local cable channel next month. The advertising cost is $2,000.
How many product units must be sold to cover the Total Cost (including the advertising cost)?
Answer :
Option 2: Sales promotion next month (10% price discount on selling price).
.How many product units must be sold to cover the Total Cost (including sales promotion cost)?
Answer
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