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Time se Ames 2 Minute 13 Second Markups and Price Setting The distinction between markup based on selling price and markup based on cost becomes crucial when setting prices. Assume you are the manufacturer Your costs are $100 per unit and you normally require a 20% marks to cover your facts allow for profit. What should your price be to the whol? The answer depends on which form of percentage make you are to employ. If the montres map is based on sellinethen the price should be 5125. Twenty percent of 125k $25.which the door moont added to the manufacturer's costs of $100 to yield the 5:25. In contrast, the percent up is based on cost the price will be $100 (2 X 51001 - 5120, a lower projected price. Which one to a percent markup based on price kerkoyed But he doesn't wally matter as long as you are consistent with expected pricing practices in your Fiemand industry Price Setting Formulae The fotowing formula odialy the dietvertion between indre marine bined on cints versus mario based on selling price when the pres through the channel fouten Charmelo Pelee Otxtt FMU) To compatto e che in die tuin percent need a fronton For mange en that productes the Pele (131) 63.00 PO/ COM/ Pricing Through the Channel Manufacturers often are interested in determining retail price for their products that may even be preprived on pode You and know how this is done the manufacturer simply begins with its own costs and required margine works forward through the distribution dannel computing orice teach level elven the margins required by each Intermediary. Assume the manufacts of 502 The wholesale needs a 15 mar and the metaller demands marins What retail siling price orice to the consume will provide chambers with their desired Fuelstrates the logic and provides the computation when the maps Operationalised in the machined on price based on the top of Fire 3 ustrates marbutased on cost. The end result is a used selling price to consumers of 5.00 The bottom part of Rome 3 predict 5122 55 wie man se on selling price led Markups Based on Cost Wholesaler Manufacturer Retailer Consumer Cost $50 Price = $60 Cost $60 Price = $69 Cost $69 Price = $100 Cost to Consumer $96.60 Price = $50 x 1.2 = $60 Price = $60 x 1.15 = $69 Price = $69 * 1.40 = $96,60 Price = $50/1..20 = $62.50 Price = $73,53/(1 - 4) = $122.55 Price = $62.50/(1-15) = $73.53 Cost Price 562.50 573.53 Coste Price $62.05 $50 Cost $73.53 Cost to Consumer $122.55 Price $122.55 Manufacturer Consumer Wholesaler Retailer Markups Based on Selling Price This process of olig marups through the channel to determine di rices referred to forward chain maruparking Smarty, morsetes can work backward through the thare using warmediaries in This is the one when manulaces or other den try to determinaronable cost for a product that can be sold to consument to predetermined peke Amaretter oferi cothing knows comments are expect a price no her than 175 for a partita private-obel designet slack The retailers meting with a number of manufactures to produits privatubelbrand. The termally demands at least a marge on its private label clothing items reber is buying direct from the manufacturer prie from the manufacture that he willing to accept in the national Theanweise The pse price les coulisy S75 - 15 x 5751 - 537.50. We were that the man is expressed in a markup baned on the 575 lingerice. The leshoot any contrattutto than 53750 per of D Question 4 10 pc Shannon's has developed a super premium craft beer to be marketed as Shannon's Irish Stout. The cost of production (brewing, canning, etc.) is about $4.00 per six pack. Shannon's needs a 10% margin, the distributor needs 40% and the retailer needs 47%. what will be the likely selling price sugested by Shannons to consumers Assume all margins are expressed as markups based on selling price Compute your answer to the nearest perly