You have recently been promoted to marketing director for Accuracy golf balls, and it is time to develop the annual marketing plan, including resource allocation decisions During the planning process, you must justify your proposed advertising and promotional spending for the upcoming fiscal year Your supervisor has asked that you look at three possible budget (i e , spending) allocation scenarios, so you will ultimately need to calculate the break even unit sales level for three possible marketing spending levels $5,500,000, $6,500,000 and $7,000,000 You have the following facts at your disposal Accuracy competes in a mature market that sells 150,000,000 units annually A unit is defined as a box containing one dozen golf balls Accuracys current unit market share of the golf ball market is 4 A box of a dozen golf balls retails for $22 00 This price was recently set using careful consumer research and a review of competitive pricing One of the first things you must do is figure out what the selling price for Accuracy will therefore be Variable manufacturing costs are $4 25 per box, with miscellaneous production and shipping costs of $2 75 per unit Accuracy uses a direct sales force to sell to sporting goods distributors, who in turn ship the balls to sports stores, golf shops and pro shops at golf course locations Salespeople receive a commission of 15 on each unit sold Retail margins are customarily 35 , and distributors earn a margin of 15 Fixed manufacturing costs are $12,000,000 Current advertising and promotional spending is $5,400,000 Accuracys marketing staff receives a salary and benefits of $325,000 Based on these information, please answer the following questions Outline the margin structure for Accuracy and calculate the unit contribution Assuming current advertising and promotion spending levels, what is the break even point in units for Accuracy What is the current profit impact of the Accuracy product Calculate the break even unit sales required at each of the three proposed alternative budgets for next year $5,500,000, $6,500,000 and $7,000,000 Be sure to use total fixed costs in your calculation What type of pricing strategy is this

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You have recently been promoted to marketing director for Accuracy golf balls, and it is time to develop the annual marketing plan, including resource allocation

You have recently been promoted to marketing director for Accuracy golf balls, and it is time to develop the annual marketing plan, including resource allocation decisions. During the planning process, you must justify your proposed advertising and promotional spending for the upcoming fiscal year. Your supervisor has asked that you look at three possible budget (i.e., spending) allocation scenarios, so you will ultimately need to calculate the break-even unit sales level for three possible marketing spending levels: $5,500,000, $6,500,000 and $7,000,000. You have the following facts at your disposal:

Accuracy competes in a mature market that sells 150,000,000 units annually. A unit is defined as a box containing one dozen golf balls. Accuracys current unit market share of the golf ball market is 4%.
A box of a dozen golf balls retails for $22.00. This price was recently set using careful consumer research and a review of competitive pricing. One of the first things you must do is figure out what the selling price for Accuracy will therefore be.
Variable manufacturing costs are $4.25 per box, with miscellaneous production and shipping costs of $2.75 per unit.
Accuracy uses a direct sales force to sell to sporting goods distributors, who in turn ship the balls to sports stores, golf shops and pro shops at golf course locations. Salespeople receive a commission of 15% on each unit sold.
Retail margins are customarily 35%, and distributors earn a margin of 15%.
Fixed manufacturing costs are $12,000,000.
Current advertising and promotional spending is $5,400,000.
Accuracys marketing staff receives a salary and benefits of $325,000.

Based on these information, please answer the following questions:

Outline the margin structure for Accuracy and calculate the unit contribution.
Assuming current advertising and promotion spending levels, what is the break-even point in units for Accuracy?
What is the current profit impact of the Accuracy product?
Calculate the break-even unit sales required at each of the three proposed alternative budgets for next year: $5,500,000, $6,500,000 and $7,000,000. Be sure to use total fixed costs in your calculation.
What type of pricing strategy is this?