Question

Marketing Scenario B: You are a supplier of a product line. Given the information below, answer each of the questions asked. You are given the following information (2017 Annual): Price per Unit $25.00 Advertising $15,000 Packaging per unit $ 5.00 Direct Labor per unit $ 8.00 Depreciation $25,000 Royalties per unit $ 2.00 Plant and Equipment $50,000 Total Units Sold 10,000 Your firm’s Total Assets are $400,000 with total equity of $75,000. Using the Contribution Margin PRICE PER UNIT METHOD, make the calculations indicated below (all formulae and calculations must be shown).Assume that the total industry’s (2017) sales figure for your product line is $1,200,000 and your firm’s 2016 sales in units were 9,600, what is the firm’s market share % of the industry’s total sales --- and your firm’s 2017 sales growth rate percentage?

Answer 1

Calculation of profit per unit

Sr. No.	Particular	Amount (in$)
1	Total Unit Sold	10000
2	Price per unit	25
3	(-) Variable Cost per Unit(see note 1)	-15
4	Contribution Per unit	10
5	Value of contribution(4*1)	100000
6	(-)Fixed Cost(see note2)	40000
7	Profit(5-6)	60000
8	Profit Per unit(7/1)	6
	Note(1)
	Packaging	5
	Direct labour	8
	Royalty	2
	Variable cost per unit	15
	Note(2)
	Advertising	15000
	Depreciation	25000
	Total fixed cost	40000

Calculation of firm's market share:

Industry sale	1200000
Firm's sale	250000
Market share(firm's sale/industry sale)	20.83%

Calculation of firm's sales growth rate%:

	$
sale in 2016	9600
sale in 2017	10000
Growth	400
Growth%(growth/2016 sale*100)	4.17%

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