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pping per order. So, now you can make some calculations The variable costs come to $75. You had an advertising allowable of $25 Calculate the contribution margin - to two decimal points. Do not write $ sign QUESTION 2 Calculate the number of orders or hits QUESTION 3 Calculate the break-even

pping per order. So, now you can make some calculations The variable costs come to $75. You had an advertising allowable of $25 Calculate the contribution margin - to two decimal points. Do not write $ sign QUESTION 2 Calculate the number of orders or hits QUESTION 3 Calculate the break-even

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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QUESTION 4 Calculate the net profit QUESTION 5 Calculate the ROAI (Return on Investment for Advertising) as a percent to two decimal places (XXX.XX). Do not include the % sign QUESTION Calculate the cost per order (CPO) (XXX.XX]. Do not include the $ sign QUESTION 7 Did you meet your advertising allowable? O Yes No
Transcribed Image Text:QUESTION 4 Calculate the net profit QUESTION 5 Calculate the ROAI (Return on Investment for Advertising) as a percent to two decimal places (XXX.XX). Do not include the % sign QUESTION Calculate the cost per order (CPO) (XXX.XX]. Do not include the $ sign QUESTION 7 Did you meet your advertising allowable? O Yes No
Wawa, Inc., a startup footwear company, currently sells just one type of sneakers, Tribe. As Wawa's marketing vice- president in charge of its anniversary sales of its Tribe sneakers, you were given a marketing budget of $2.5 million for the upcoming sale for one 30-second direct-response internet ad. The ad provides the website address that will allow Wawa's to track when a hit has resulted from people seeing this particular ad. You get 1.7 million hits on that website. Is this good? How many Tribe sneakers did you eventually sell as a result? Did the ad pay for itself or not? Could you have done better by spending your money on some other form of advertising Let's say that of the 1.7 million visitors to your site, 0.005 percent ordered the Tribe sneakers by visiting your website. You, of course, created a special Web address just for this commercial, so you could accurately evaluate how many responses and orders this one ad produced. Let's also say that the price the Tribe sneakers went from $165 to its sales price of $115, including shipping and handling. The variable costs come to $75. You had an advertising allowable of $25 per order. So, now you can make some calculations Calculate the contribution margin - to two decimal points. Do not write $ sign QUESTION 2 Calculate the number of orders or hits QUESTION 3 Calculate the break-even QUESTION 4 Calculate the net profit.
Transcribed Image Text:Wawa, Inc., a startup footwear company, currently sells just one type of sneakers, Tribe. As Wawa's marketing vice- president in charge of its anniversary sales of its Tribe sneakers, you were given a marketing budget of $2.5 million for the upcoming sale for one 30-second direct-response internet ad. The ad provides the website address that will allow Wawa's to track when a hit has resulted from people seeing this particular ad. You get 1.7 million hits on that website. Is this good? How many Tribe sneakers did you eventually sell as a result? Did the ad pay for itself or not? Could you have done better by spending your money on some other form of advertising Let's say that of the 1.7 million visitors to your site, 0.005 percent ordered the Tribe sneakers by visiting your website. You, of course, created a special Web address just for this commercial, so you could accurately evaluate how many responses and orders this one ad produced. Let's also say that the price the Tribe sneakers went from $165 to its sales price of $115, including shipping and handling. The variable costs come to $75. You had an advertising allowable of $25 per order. So, now you can make some calculations Calculate the contribution margin - to two decimal points. Do not write $ sign QUESTION 2 Calculate the number of orders or hits QUESTION 3 Calculate the break-even QUESTION 4 Calculate the net profit.
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