Marketing Metrics Answers

Topics: Variable cost, Costs, Cost Pages: 25 (5074 words) Published: March 25, 2013
Metrics Mastery Worksheets are designed to be in class exercises that your students can work on in class. This is a master document that provides all worksheets questions and answers. You can modify or change it as needed in order to prepare one page two sided exercises for your students to hand out in class. You can also easily turn the answers into powerpoint slides to review the answers in class.

Table of Contents

Worksheet: Metric 1 Expense Types2

Worksheet: Metric 2 Percentage Change5

Worksheet: Metric 3 Market Share & Market Analytics8

Worksheet: Metric 4 Contribution Margin11

Worksheet: Metric 5 Mark-up & Margin14

Worksheet: Metric 6 Pricing Wholesale to Retail17

Worksheet: Metric 7 Break-Even20

Worksheet: Metric 8 Return on Marketing Investment (ROMI)23

Worksheet: Metric 1 Expense Types

1) The Comfy Chair Company makes reclining chairs at its plant and sells them exclusively through its own retail store. It has the following expenses: Plant rent and taxes = $12,000.00

Office and management expenses = $220,000.00
Machinery and equipment purchased = $100,000.00
Direct materials = $27.00/chair
Direct labour = 4 hours/chair @ $14.00/hour
Transportation = $5.00/chair
Commercial store front unit purchase = $500,000.00 Advertising costs = $100,000.00
Sales staff wages before commissions = $250,000.00 Commission = $12.00/chair
a) Identify the Comfy Chair Company’s variable costs. b) What is the total cost to produce and sell each reclining chair? c) Identify the Comfy Chair Company’s fixed costs.
d) What are the total fixed costs?
e) Identify the one-time fixed costs incurred by the Comfy Chair Company. f) What are the total one-time fixed costs?

(a)Direct materials = $27.00/chair
Direct labour = 4 hours/chair @ $14.00/hour
Transportation = $5.00/chair
Commission = $12.00/chair
(c)Plant rent and taxes = $12,000.00
Office and management expenses = $220,000.00
Advertising costs = $100,000.00
Sales staff wages = $250,000.00
(e)Machinery and equipment purchased = $100,000.00
Commercial store front unit = $500,000.00

2) Thompson Toiletries, Inc. has developed an addition to its mens’ cologne line tentatively branded Ode d’Toad Cologne. It costs 45 cents to produce each 60mL bottle, and heavy advertising expenditures in the first year would cost $900,000. Ode d’Toad Cologne is priced at $7.50 for a 60mL bottle. a) What is the variable cost per unit to produce a bottle of Ode d’Toad? b) What are the total fixed costs to produce and sell Ode d’Toad?

(a)Variable cost per unit = $0.45
(b)Total fixed costs = $900,000

3) Executives of Radical Recordings Ltd. produced an album entitled Sunshine/Moonshine by the Starshine Sisters Band. The cost and price information was as follows: |Album cover |$1.00 | |Songwriter’s royalties |$0.30 | |Recording artist’s royalties |$0.70 | |Direct material and labour costs to produce each album |$1.00 | |Cost of producing the album (studio fee, advertising, promotional|$100,000.00 | |expenses, etc) | | |Selling price |$7.00...
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