marketing 1200 Value 10% Data for Questions 3 and 4 Item Units Sold 100.000 Unit Cost...

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Value 10% Data for Questions 3 and 4 Item Units Sold 100.000 Unit Cost $40 Target Refum on Sales Advertising $1,500,000 Consu

marketing 1200

business accounting

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Answer #1

1) Breakeven price = Unit cost + (Advertising + Consumer promotions + Personal selling + Dealer promotion + Product Development) / Units sold

= $40 + [(1,500,000 + 1,800,000 + 400,000 + 1,200,000 + 700,000) / 100,000]

= $40 + $56

= $96

2) Selling price = Breakeven price / (1 -Target return) = $96 / (1 - 10%) = $96 / 0.9 = $106.67

3) Besides break-even the factors that need to considered before setting price includes competition, purchasing power of customer, tiered pricing and competition

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