Question

23 Within a given distribution channel, the following information is available concerning trade margins and costs. A wholesaler has a unit selling price of $215 and a unit cost of $140. The retailer requires a 36% markup on selling price. The manufacturer has unit variable costs of $35. Calculate the wholesaler percent markup on cost. Report your answer as a percentage and round to the nearest percent. please show work.

24 Within a given distribution channel, the following information is available concerning trade margins and costs. A wholesaler has a unit selling price of $260 and a unit cost of $130. The retailer requires a 21% markup on selling price. The manufacturer has unit variable costs of $62. Calculate the manufacturer's dollar margin per unit. Round your answer to the nearest dollar. please show work

25 Within a given distribution channel, the following information is available concerning trade margins and costs. A wholesaler has a unit selling price of $894 and a unit cost of $521. The retailer requires a 45% markup on selling price. The manufacturer has unit variable costs of $306. Calculate the manufacturer's percent markup on cost. Report your answer as a percentage and round to the nearest percent.please show work.

26 A manufacturer is considering a switch from manufacturers’ representatives to an internal sales force. The following cost estimates are available. Manufacturers’ reps are paid 8.4% commission and incur $575,000 in fixed costs, while an internal sales force has fixed costs projected at $2,180,000 and would receive 3.3% commission. At what sales volume would the manufacturer be indifferent between the two alternatives? Report your answer in dollars.please show work.

27 A manufacturer is considering a switch from manufacturers’ representatives to an internal sales force. The following cost estimates are available. Manufacturers’ reps are paid 8.7% commission and incur $590,000 in fixed costs, while an internal sales force has fixed costs projected at $1,880,000 and would receive 3.0% commission. Assume that sales revenue is double the breakeven volume or the point at which the manufacturer would be indifference between reps and an internal sales force. At this volume, how much would the manufacturer save, assuming the company had switched to an internal sales force? Report your answer in dollars. please show work.

Answer 1

Q23.
Wholesale selling price			215
Less: Wholesale cost			140.00
Wholesale markup in $			75.00
Wholesale markup as % of cost			54.00%
	(75/140*100)
Q24.
Manufacturer Selling price (cost to wholesaler)				130
Less: Unit variable cost				62
Unit dollar margin				68
Q25.
Manufacturer Selling price (cost to wholesaler)				521
Less: Unit variable cost				306
Unit dollar margin				215
Manufacturer markup on cost (215/306)*100				70.26%
Q26.
			Fixed csot	Commission
Representative			575,000	8.40%
Internal sales force			2,180,000	3.30%
Difference			1,605,000	5.10%
Indifference point: Difference in FC/ Difference in Commission
		1605000 /5.10% = $ 31470588
Q27.
			Fixed csot	Commission
Representative			590,000	8.70%
Internal sales force			1,880,000	3.00%
Difference			1,290,000	5.70%
Indifference point: Difference in FC/ Difference in Commission
		1290000 /5.70% = $22631,579
Sales (22631579*2)			45263158
Additional fixed cost to be paid				1290000
Savings in commission (45263158*5.70%)				2580000
Savings due to switching to Internal sales force				1,290,000