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NPI is a health research and manufacturing company which recently discovered that increased sulforaphane( at least...

NPI is a health research and manufacturing company which recently discovered that increased sulforaphane( at least 5,000 mg every 2 days) in a persons diet has been able to extend a persons life span by at least 30 years. The company developed a new product called "Sustain Your Life" which is a small tablet that contains 5,000 mg of sulforaphane in each tablet. The health tablet market size is currently measured at 150 million units(15 tablets per bottle) of which NPI SERVES 35%. NPI plans to launch this new tablet initially across the United States using its current distribution channel of supermarket chains and health food stores which have 25,000 locations combined. The company than plans to expand the product market area to include South America, Europe and Asia and also intends to setup manufacturing plans in these expanded market areas.
NPI fixed cost is currently at $5 million per year with the cost to produce one bottle of 15 tables at $2.35. The finding of several research studies has determined that consumers would be willing to pay $15.35 for one bottle of 15 tables at which the retail selling price would be targeted. The retailers margin is 30%,the wholesalers margin is 20%.
(Round percentages to one decimal point. Round currency to dollars and cents)

a. What is the company's selling price of one bottle of 15 tablets to its wholesalers?

b. What is the products contribution margin as a percentage?

c. What is the products contribution per unit in dollar?


Solutions

Expert Solution

NPI developed a new product called "Sustain Your Life" which is a small tablet that contains 5,000 mg of sulforaphane in each tablet.

The health tablet market size is currently measured at 150 million units (15 tablets per bottle) of which NPI SERVES 35%.

NPI fixed cost is currently at $5 million per year.

Cost to produce one bottle of 15 tables at $2.35.

The finding of several research studies has determined that consumers would be willing to pay $15.35 for one bottle of 15 tables at which the retail selling price would be targeted.

The retailers’ margin is 30%, the wholesalers margin is 20%.

jeff jeffy answered 1 year ago
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