SHOW ALL WORK AND CALCULATIONS FOR A THUMBS-UP RATING
Question 1 (5 points) A shop-owner purchases a product for $40 and sells it for $100. Calculate the following. a) Dollar markup (1 pt) b) Markup percent (1.5 pts) c) Dollar margin (1 pt) d) Margin percent (1.5 pts)
Question 2 (5 points) Another shop owner purchases a product for $100 and desires a margin of 40%. a) What should be the selling price? (2.5 pts) b) What will be the dollar markup? (1 pts) c) What will be the markup percent? (1.5 pts)
Question 3 (15 points) The brand manager for Modern Foods, Inc. is finalizing plans to launch a new version of the company’s fruit juice. Her team has decided on a retail price of $70 per case for the product. The product will be sold through wholesalers who will sell to retailers for onward sale to consumers. Wholesalers earn a margin of 15 percent on sales to retailers, and retailers earn a margin of 40 percent on the retail price. Modern Foods’ policy requires products to earn a 60 percent margin on the price to wholesalers. a) What will be the cost per case to retailers? (3 pts) b) What will be the cost per case to wholesalers? (3 pts) c) What will be the wholesalers’ dollar margin per unit? (3 pts) d) If 1,000,000 cases of the product are sold, what will be Modern Food’s: i) total sales revenue? (3 pts) ii) total contribution? (3 pts)