Question

In: Economics

Five brands are competing in the market.Company A has 35,000 units sold at $5.00/unit. It...

Five brands are competing in the market.

Company A has 35,000 units sold at $5.00/unit. It sold to 7,000 households in market size of 84,000.
Company B has 12,000 units sold and revenues of $54,000 for these units. It sold to 3,000 households in market size of 21,000.
Company C has 14,000 units sold at $5.50/unit. The average household purchase was 2 units. Its market size of 105,000.
Company D has 5,000 units sold at $6.00/unit. It sold to 833 households in market size of 5,000.
Company E has 22,000 units sold and revenues of $126,500 for these units. It sold to 5,500 households in market size of 22,000

What is the volume (unit) market share for Company A? (Show as xx%.)

What is the "three firm" concentration revenue ratio value? (Show as xx.xx%)

What is the Herfindahl unit index score value? (Show as x.xxxx)

What is the market penetration percentage value for Company C? .(Show as xx.xx%)

What is the market penetration share percentage for Company D? (Show as xx.xx%)

Expert Solution

What is the volume (unit) market share for Company A?

Market Share by Units = (Unit Sales / Total Market Unit Sales) x 100%

As per the question:

Unit sales of company A = 35,000 units

Total Market Unit Sales = 35,000 units + 12,000 units + 14,000 units + 5,000 units + 22,000 units = 88000 units

Total Market Unit Sales = 88000 units

Market Share by Units = (35,000 units/88000 units) x100

= 0.3977 x100 = 39.77%

Market Share by Units = 39.77%

What is the "three firm" concentration revenue ratio value?

Concentration revenue ratio measures the share of top n firms in the industry and identify the nature or type of industry like, market is monopoly, oligopoly or competitive.

3CR = (R1 + R2 + R3)/RT

Where,

CR = Concentration revenue ratio ( Here use 3CR because we have to calculate "three firm" concentration revenue ratio value)

R1 , R2 & R3 is the revenue of top four values.

RT = Sum of revenues of all firms (RT)

As per the question:

Revenue of the company-

Revenue = Total unit sales x Price per unit

A = 35,000 x 5 = $ 175,000

B = $54,000

C = 14,000 x 5.50 = $77,000

D = 5000 x 6 = 3,000

E = $126,500

RT = $435,500

3CR = (R1 + R2 + R3)/RT

3CR = ($ 175,000 + $126,500 + $77,000)/ $435,500

= 0.8691 x 100 = 86.91%

3CR = 86.91%

What is the Herfindahl unit index score value?

Its focus on market concentration.

Herfindahl unit index score value = The market share percentage of firm A^2 + The market share percentage of firm B^2 + The market share percentage of firm C^2 + The market share percentage of firm D^2 + The market share percentage of firm E^2

Market Share = Company’s Revenue (Sales)/Entire Market Revenue (Sales)

The market share percentage of firm A = ($ 175,000//$435,500) x 100 = 40.18

The market share percentage of firm B = ($54,000/$435,500) x 100 = 12. 39%

The market share percentage of firm C = ($77,000/$435,500) x 100 = 17.68%

The market share percentage of firm D = ($3,000/$435,500) x 100 = 0.68%

The market share percentage of firm E = ($126,500/$435,500) x 100 =29.04%

We we take the figure in whole number

Herfindahl unit index score value = 40^2 + 12^2 + 18^2 + 1^2 + 29^2

= 1600 + 144 + 324 +1 + 841 = 2910

Herfindahl unit index score value = 2910

What is the market penetration percentage value for Company C?

Market penetration rate, or penetration rate, is the percentage of your target customers that make at least one purchase over a period of time.

Market penetration percentage value for Company C = ( number of units sold within a reporting period by company C/Total sales volume including those sold by competitors. ) x 100

Where sales volume is-Sales volume is the number of units sold within a reporting period.

Market penetration percentage value for Company C = (14000/88000) x 100 = 15.90%

Market penetration percentage value for Company C = 15.90%

What is the market penetration share percentage for Company D?

Market penetration percentage value for Company D = (Number of people who have purchased product of company C/Market potential or size of the market ) x 100

Market penetration percentage value for Company D = (833/5000) x 100 = 16.66%

Market penetration percentage value for Company D = 16.66%

Rahul Sunny answered 2 years ago

Diego Company manufactures one product that is sold for $80 per unit. The following information pertains to the company’s first year of operations in which it produced 40,000 units and sold 35,000 units.

Diego Company manufactures one product that is sold for $80 per unit. The following information pertains to the company’s first year of operations in which it produced 40,000 units and sold 35,000 units. Variable costs per unit: Manufacturing: Direct materials$24 Direct labour$14 Variable manufacturing overhead$2 Variable selling and administrative$4 Fixed costs per year: Fixed manufacturing overhead$800,000 Fixed selling and administrative expenses$496,000Required:1. What is the unit product cost under variable costing?2. What is the unit product cost under absorption costing?3. What is the company’s total contribution margin under variable costing?4....

Purchase Units Unit Cost Sold Units Beg.nventory &

Purchase Units Unit Cost Sold Units Beg.nventory 3000 0.60$ Dec3 4000 0.74$ Dec5 4400 Dec17 2200 0.80$ Dec22 2100 Compute ending inventory and cost of goods sold using moving- average cost, assuming the Company uses the perpetual inventory system

A diversified financial conglomerate has five units (subsidiaries). One unit conduct thrift operations; the second unit...

A diversified financial conglomerate has five units (subsidiaries). One unit conduct thrift operations; the second unit conducts consumer finance operations; the third, mutual fund operations; the fourth, securities operations; and the fifth, insurance operations. As a financial analyst for the conglomerate;s holding company, you have been asked to assess all of the units and to indicate how each unit will be affected as economic conditions change as well as which units will be most affected. In the past few months,...

Units Sold to Break Even, Unit Variable Cost, Unit Manufacturing Cost, Units to Earn Target Income...

Units Sold to Break Even, Unit Variable Cost, Unit Manufacturing Cost, Units to Earn Target Income Werner Company produces and sells disposable foil baking pans to retailers for $2.50 per pan. The variable cost per pan is as follows: Direct materials $0.30 Direct labor 0.57 Variable factory overhead 0.74 Variable selling expense 0.17 Fixed manufacturing cost totals $136,541 per year. Administrative cost (all fixed) totals $18,619. Required: 1. Compute the number of pans that must be sold for Werner to...

Philips Company has the following data available Transaction Units purchased Unit cost Units sold Transaction 300...

Philips Company has the following data available Transaction Units purchased Unit cost Units sold Transaction 300 10 March 1 Purchase 200 12 April 25 sale 330 June 10 Purchase 370 14 July 20 sale 250 October 30 Purchase 340 11 December 15 sale 390 if Philips uses a perpetual FIFO inventory system, the cost of ending inventory on Dec 31 is I need the steps in the form of table

Potter Company has the following data available: Transaction Units Purchased Unit Cost Units Sold Beginning Inventory...

Potter Company has the following data available: Transaction Units Purchased Unit Cost Units Sold Beginning Inventory 500 $10 March 1 Purchase 200 $12 April 25 Sale 350 June 10 Purchase 300 $14 July 20 Sale 250 October 30 Purchase 300 $15 December 15 Sale 400 If Potter Company uses a perpetual movingminus average inventory system, the cost of goods sold for the year is ________. (Round average cost per unit to four decimal places and all other numbers to...

If 12,500 units are produced and sold, what is the variable cost per unit produced and sold?

Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost Per UnitDirect materials$ 5.60Direct labor$ 3.10Variable manufacturing overhead$ 1.40Fixed manufacturing overhead$ 4.00Fixed selling expense$ 2.60Fixed administrative expense$ 2.20Sales commissions$ 1.20Variable administrative expense$ 0.454. If 12,500 units are produced and sold, what is the variable cost per unit produced and sold? (Round your answer to 2 decimal places.)

You have a company that has sold 500 units for $300,000. Each unit costs $200 to...

You have a company that has sold 500 units for $300,000. Each unit costs $200 to make. Each year we also have a sales commission of $40 per bike. Our fixed costs are 15,000, but I want to make a target profit of $30,000. What is the breakeven in sales

Innovation Inc.'s production budget for January is 35,000 units and includes the following component unit costs:...

Innovation Inc.'s production budget for January is 35,000 units and includes the following component unit costs: direct materials, $16; direct labor, $20; variable overhead, $12. Budgeted fixed overhead is $70,000 (35,000 units × 1/2hour × $4unit). Actual production in January was 36,000 units. Actual unit component costs incurred during January include direct materials, $16.50; direct labor, $18.90; variable overhead, $13.64. Actual fixed overhead was $67,000. The standard fixed overhead application rate per unit consists of $4 per machine hour and...

1. If 18,000 units are produced and sold, what is the variable cost per unit produced and sold?

Refer to the data given in Exercise 1-7. Answer all questions independently. Kubin Company's relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000 units, its average costs per unit are as follows: Required: 1. If 18,000 units are produced and sold, what is the variable cost per unit produced and sold? 2. If 22,000 units are produced and sold, what is the variable cost per unit produced and sold? 3. If 18,000 units are...