HW Help Please

[Studentwarr]

AAA.com manufactures and markets alphabet soup. People can purchase the soup for $1.50 per sku at Wal-Mart stores. The manufacturing variable cost is $.25 per unit and the fixed costs for the manufacturer total $30,000. The manufacturer’s contribution margin is 50% and the retailer’s margin is 33%. If Wal-Mart sells 500,000 units at retail, calculate the profit/loss for:
A. the manufacturer (AAA.com)
B. the wholesaler that sells to Wal-Mart
C. and the retailer (Wal-Mart)

I am having trouble figuring out the Manufacturer Unit CGS since I do not have the wholesaler's margin or VC.
Channel Member Unit Cost of Goods Sold Unit Selling Price Gross Margin as a Percentage of Selling Price Manufacturer $0.50 Wholesaler 0.5 1.00 50.0% Retailer 1.00 1.50 33.3%
Wholesalers Price Manufacturer's Price
33%: .33(1.5)=.5 1.50-.50= 1.0 50%: .5(1)=.5 1-.5= .5
	Dollar Amount
Net Sales	$750,000.00
CGS	125,000
Gross Profit Margin	$625,000.00
Fixed Expenses	30,000
Net Profit Margin	$595,000.00

 

[Studentwarr]

Work Added

Very good point Denis. I am struggling because we were not given any information about the wholesaler. All of the examples that we did in class gave us the margin of the wholesaler also. Thank you for any help!

 

[Deleted member 4993]

Work back ward....

Knowing selling price at Walmart and the margin - you should be able to calculate the purchasing price of Walmart.

That becomes the selling price for the wholeseller .... and continue....