Company A has developed a new item. They sell the item directly to multiple retailers who sell them to end-users. The following details their first year sales results and expenses. Gross Sales Revenue to Retailers $ Trade Promotion to Retailers (10% of the list price) $ Net Sales Revenue to Retailers $ Cost of Goods Sold Advertising Expense Expense for Consumer Promotions Corporate Overhead Research & Development Costs Sales & Marketing Administration Expenses List Price to Retailers Number of Cookstoves Sold to Retailers es $ ssssss $ $ $ $ $ $20/unit $ 3,000,000.00 300,000.00 2,700,000.00 1,200,000.00 200,000.00 100,000.00 200,000.00 100,000.00 300,000.00 150,000.00 Question: Assume Company A spends an additional $100,000 on advertising and they think they can sell 80,000 more items to the retailers. They will continue to offer retailers a trade promotion of 10% promotion of the items list price. What will be the Total Marketing and Sales Expenses, Net Marketing Contribution, Marketing ROS, and Marketing ROI?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Company A has developed a new item. They sell the item directly to multiple retailers
who sell them to end-users. The following details their first year sales results and
expenses.
Gross Sales Revenue to Retailers
Trade Promotion to Retailers (10% of the list price) $
Net Sales Revenue to Retailers
Cost of Goods Sold
Advertising Expense
Expense for Consumer Promotions
Corporate Overhead
Research & Development Costs
Sales & Marketing Administration Expenses
es es es
List Price to Retailers
Number of Cookstoves Sold to Retailers
$
$
$
$
$
es es es
$
$
$
$20/unit
$
3,000,000.00
300,000.00
2,700,000.00
1,200,000.00
200,000.00
100,000.00
200,000.00
100,000.00
300,000.00
150,000.00
Question: Assume Company A spends an additional $100,000 on advertising and they
think they can sell 80,000 more items to the retailers. They will continue to offer
retailers a trade promotion of 10% promotion of the items list price. What will be the
Total Marketing and Sales Expenses, Net Marketing Contribution, Marketing ROS, and
Marketing ROI?
Transcribed Image Text:Company A has developed a new item. They sell the item directly to multiple retailers who sell them to end-users. The following details their first year sales results and expenses. Gross Sales Revenue to Retailers Trade Promotion to Retailers (10% of the list price) $ Net Sales Revenue to Retailers Cost of Goods Sold Advertising Expense Expense for Consumer Promotions Corporate Overhead Research & Development Costs Sales & Marketing Administration Expenses es es es List Price to Retailers Number of Cookstoves Sold to Retailers $ $ $ $ $ es es es $ $ $ $20/unit $ 3,000,000.00 300,000.00 2,700,000.00 1,200,000.00 200,000.00 100,000.00 200,000.00 100,000.00 300,000.00 150,000.00 Question: Assume Company A spends an additional $100,000 on advertising and they think they can sell 80,000 more items to the retailers. They will continue to offer retailers a trade promotion of 10% promotion of the items list price. What will be the Total Marketing and Sales Expenses, Net Marketing Contribution, Marketing ROS, and Marketing ROI?
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