Assume that you are in charge of pricing for a firm thatproduces pickles. You have fixed costs of $2,000,000.Variable costs are $0.75 per jar of pickles. You are selling your product to retailers for $0.89. You sell thepickles in cases of 24 jars per case.a. How many jars of pickles must you sell to breakeven?b. How much must you sell in dollars to break even?c. How many jars of pickles must you sell to breakeven plus make a profit of $300,000?d. Assume a retailer buys your product for S0.89.His business requires that he prices products witha 35 percent markup on cost. Calculate his sellingprice.e. Assume you have an MSRP of $1.39 for the pickles.If a retailer has a required 35 percent retailer margin on all products he sells, what is the most he iswilling to pay the producer for the pickles?f. A clothing retailer knows that to break even andmake a profit he needs to have a minimum retailermargin (also referred to as a contribution margin orgross margin) of at least 60 percent. If he is to sella pair of shorts for the manufacturer's suggestedretail price of $49.99, what is the most he can paythe manufacturer for the shorts and maintain hismargin?g. A salesperson is developing a quote for a quantityof disposable hospital gowns. His cost for each caseof gowns is $85.00. His firm requires that he havea 20 percent margin so he is using a markup onselling price calrulation to price the gowns. Whatwill his quote be per case of gowns if he uses a 20percent markup on selling price?
Assume that you are in charge of pricing for a firm that
produces pickles. You have fixed costs of $2,000,000.
Variable costs are $0.75 per jar of pickles. You are selling your product to retailers for $0.89. You sell the
pickles in cases of 24 jars per case.
a. How many jars of pickles must you sell to break
even?
b. How much must you sell in dollars to break even?
c. How many jars of pickles must you sell to break
even plus make a profit of $300,000?
d. Assume a retailer buys your product for S0.89.
His business requires that he prices products with
a 35 percent markup on cost. Calculate his selling
price.
e. Assume you have an MSRP of $1.39 for the pickles.
If a retailer has a required 35 percent retailer margin on all products he sells, what is the most he is
willing to pay the producer for the pickles?
f. A clothing retailer knows that to break even and
make a profit he needs to have a minimum retailer
margin (also referred to as a contribution margin or
gross margin) of at least 60 percent. If he is to sell
a pair of shorts for the manufacturer's suggested
retail price of $49.99, what is the most he can pay
the manufacturer for the shorts and maintain his
margin?
g. A salesperson is developing a quote for a quantity
of disposable hospital gowns. His cost for each case
of gowns is $85.00. His firm requires that he have
a 20 percent margin so he is using a markup on
selling price calrulation to price the gowns. What
will his quote be per case of gowns if he uses a 20
percent markup on selling price?
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