Marketing - Standalone book
13th Edition
ISBN: 9781259573545
Author: Roger A. Kerin, Steven W. Hartley
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 14, Problem 5AMK
Summary Introduction
To calculate: The sales price that is essential to achieve the targeted profit of $1 million.
Introduction:
The method that is adopted by the firm to fix the selling price is known as pricing. The pricing generally depends on the average cost and the perceived value of the product.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Elsa Corporation, a company that manufactures and markets low-end table computers, asked ourfriend Ms. Market Researcher to create the demand curve for its SD 721 model. She conductedsome market research and gave Elsa the demand curve as well as some additional information:350,000 units of SD 721 will sell at a price of $250.(1) What is the point price elasticity if 500,000 units will sell at a price of $200?
(2) What is the point price elasticity if 125,000 units will sell at a price of $305?
You are brand manager at Arrow Cosmetics and responsible for Silkskin body lotion. Silkskin's annual contribution is currently $2.1 million. The R&D department has just developed a new Aloe Vera-based body lotion formula. You must decide whether you want to change the formula for the Silkskin lotion or stay with the old one . The variable costs will be slightly higher for the new formula ($7.00 per bottle), but you guess that an increase in sales might compensate for the higher costs. You plan on selling the new Silkskinfor $ 12.00 per bottle. You can imagine three annual sales scenarios: 600,000 , 300,000 and 200,000 units sold, which you estimate the chances to be 30, 40, and .30, respectively.
1. Under which scenario (s) would you introduce the new Silkskin?
2. Would you introduce the new formula?
3.Imagine a market research firm that provides perfect information. In other words , if the firm tells you that annual sales will be "x", then sales will in fact be x. What is…
Hayworth Corporation has Just segmented last year's income statement into its ten product lines. The chief executive officer (CEO) is curlous as to
what effect dropping one of the product lines at the beginning of last year would have had on overall company profit. What is the best number for the
CEO to look at to determine the effect of this elimination on the net operating income of the company as a whole?
Multiple Choice
the product line's sales dollars
the product line's contribution margin
the product line's segment margin
the product line's segment mergin minus an allocated portion of common fixed expenses
Chapter 14 Solutions
Marketing - Standalone book
Ch. 14.1 - Prob. 14.1LOCh. 14.1 - Prob. 14.1LRCh. 14.1 - Prob. 14.2LRCh. 14.1 - Prob. 14.3LRCh. 14.1 - Prob. 14.4LRCh. 14.1 - Prob. 14.5LRCh. 14.2 - Prob. 14.2LOCh. 14.3 - Prob. 14.3LOCh. 14.4 - Prob. 14.4LOCh. 14.4 - Prob. 14.6LR
Ch. 14.4 - Prob. 14.7LRCh. 14.4 - Prob. 14.8LRCh. 14 - Prob. 1AMKCh. 14 - Prob. 2AMKCh. 14 - Prob. 3AMKCh. 14 - The Hesper Corporation is a leading manufacturer...Ch. 14 - Prob. 5AMKCh. 14 - Prob. 6AMKCh. 14 - Prob. 7AMKCh. 14 - Prob. 8AMKCh. 14 - Prob. 1VCCh. 14 - Prob. 2VCCh. 14 - Prob. 3VCCh. 14 - Prob. 4VCCh. 14 - Prob. 5VC
Knowledge Booster
Similar questions
- The owner of a retail store that specializes in school supplies plans to buy TV ad time during the broadcast of Wheel of Fortune, a game show that has a rating of 20. It reaches 15,000 people in the primary target audience and a 30-second spot costs $500. What is the cost per thousand (CPM) of the show? 1) $33 2) $133 3) $30 4) $23 5) $750 Dravinur Dnnarrow_forwardCan you explain the answer a bit more. I'm having a hard time understanding which answer is the Decision alternative Maximum Minimum Basic model $ $ Advanced model $ $arrow_forwardYou are asked to help your boss deciding who is considering whether to make or buy a part fora top most demanding product of the company.Your company can make the component for $40 per unit or buy it for $50 per unit from vendor.If the Company decides to make the component, it will require 4 hours of machine time tomake each part. The company has 2,000 hours of machine time available per month. Shouldthe company make or buy the component? How many max parts company can make?________________________________________________________________arrow_forward
- Suppose executives estimate that the unit variable cost for their DVD recorder is $100, the fixed cost related to the product is $10 million annually, and the target volume for next year is 100,000 recorders. What sales price will be necessary to achieve a target profit of $1 million?arrow_forwardConsider a restaurant that aims to sell meals with high quality. Will this restaurant be less responsiveness in term of price? O True Falsearrow_forwardYou've purchased a 1 liter bottle of Coffee Liqueur for $19.95. You serve the liqueur in 1.5 oz. drinks. 1) How many drinks can be obtained from the bottle? drinks 2) What is the cost per drink? $ 3) If you want the beverage cost percent to be 18%, how much should you be charging for each cocktail? $ per drinkarrow_forward
- A cup of ricotta cheese weighs 9 ounces. Ricotta is purchased in 3-pound containers for $4.21. How much would 2 ¼ cups cost?arrow_forwardIf the unit selling price is P16, the unit variable cost is P12, and fixed costs are P160,000, what is the break-even sales (units)?arrow_forwardplease provide explaination as to why the other options are incorrect. thank youuuuuuuuarrow_forward
- Read the scenario and then, using the table (if you prefer) , tell us the pros and cons for each of the options (A,B,&C) from both the customer and salesperson's perspective while considering the circumstances. Pros - Customer & Salesperson Perspective Cons - Customer & Salesperson Perspective option A Customer: Salesperson: Customer: Salesperson: Option B Customer: Salesperson: Customer: Salesperson: Option C Customer: Salesperson: Customer: Salesperson:arrow_forwardA utility company has the added challenge of estimating the impact of an outage on its customers. In other words, a good-quality machine will theoretically lead to fewer (or shorter) outages. That is a real benefit to the company as customers without service can lead to a public relations nightmare. That said, there is real value to a reduction in outages and it should be considered as part of the spending analysis. Everyone, How would you go about estimating the theoretical value of "fewer outages"?arrow_forward$2.7 million. the cost of goods sold is estimated to be 40 percent of sales, and corporate overhead would increase by $308,000, not including the cost of either acquiring or leasing office space. the corporation will have to invest $2.7 million in office furniture, office equipment, and other up-front costs associated with opening the new office before considering the costs of owning or leasing the office space. a small office building could be purchased for sole use by the corporation at a total price of $6.1 million, of which $900,000 of the purchase price would represent land value, and $5.2 million would represent building value. the cost of the building would be depreciated over 39 years. the corporation is in a 21 percent tax bracket. an investor is willing to purchase the same building and lease it to the corporation for $690,000 per year for a term of 15 years, with the corporation paying all real estate operating expenses (absolute net lease). real estate operating expenses…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,