Studentwarr
New member
- Joined
- Feb 28, 2012
- Messages
- 2
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)
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. | |||||||||||||||||||||||
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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 | ||||||||||||||||||||||
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