Retail price

Retail margin

10
33%

Retail markup = Retail cost * Margin

Retail price = Retail cost + Retail markup
Retail price = Retail cost + Retail cost* margin
10 = Retail cost (1+0.33)
Retail cost = 10/1.33 = 7.5
Wholesale margin

12%

Wholesale cost

6.70

Market size
X market share

20000000
4800000

Variable Costs
Manufacturing
Shipping + breakage
Sales commission
Total
Fixed cost
Manufacturing
Advertising
Salaries
Total

0.9
0.2
0.67
1.77

9000000
5000000
350000
14350000

1)
Unit Contribution
UC

=
4.93

2)
Break even point

2912860.7 units

3)

Required market share to break even

14.564303

4)

Profit impact

9296857.1

Selling price - Variable c

elling price - Variable cost per unit

5)

a.

Market size

23000000

Advertising cost

10000000

Fixed Cost

19350000

Break even

3927795 Units

Profit impact
b.

Sales

c.

Market share
Revised Profit impact
Sales

d.

market share

9296857
5814934
25.2823
10000000
5957663
25.90288

Profit impact =

(Unit Revenue - Unit C

Unit Revenue - Unit Cost)*Projected Unit Sales)-Fixed Cost

6)
Retail margin
Retail cost

6.250

Unit Contribution

4.480

Brand X sales
Break even
Profit impact
b.

Sales

c.

market share
Revised Profit impact
Sales

d.

Wholesale cost

Market size

a.

40%

market share

23000000
5520000
3203125 units
9296857
5278316
22.9492
3500000
3984375
17.3234

Profit impact =

(Unit Revenue - Unit C

Unit Revenue - Unit Cost)*Projected Unit Sales)-Fixed Cost