Q1-2

QUESTION 1 Shannon's distributes its beer retailer's cost per six pack is $8.00. The wholesaler selling the beer to the retailer for this price. Shannon's sells a six pack to the wholesaler for 5540. Shannon's variable costs of production, packaging and distribution are $3.60 per six pack Shannon's has the following annual fixed a wholesaler, Miller of Denton. The retail selling price for a six pack of its typical craft beer is $12.00. The operating and marketing costs: Marketing Costs Consumer Advertising Trade Promotion Sales Promotion $57,630 538,255 530,000 518,000 What is Shannon's annual break-even in six packs of beer soid? QUESTION 2 Gven the above information in Q1. Shannon's wants to increase ts sa es to retailers by 20% in the nex, year, Management est mates that the incremental promotion program required to gene ate sufficient demand to boost sales by 20% will oe Personal Selling Cost Conzumer Advertizing Trade Promotion Sale: Promction S 60.000 jexcluaive of commistion) 5 55.774 5 36.965 5 25000 Shannon's wil reed to hire an additional sa es person (ca d a se ati anc commission) and provice some added admi-istrative support. the sees person : la ay p Lad m nistrat sucoot w i cost about S60.00 per year. The int orsons comm tton w I etne ecutuun: asoos oersu pack solc. Theincremental coats of consumer adverti rg trade cromotion and se es promotion necessery to support se es ih tre ne marke