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Profit, breakeven, and margin

Kindly provide calculations to clarify.

#1:
Consider the following information about one of Sony's channels (and keep in mind that sales minus cost of goods sold results in \$ gross margin):

Sony's selling price (to its wholesalers) on a 42" television = \$600.
Sony's wholesalers in this channel set their wholesale price such that they receive a Gross Margin of 20% on Sony 42" televisions.
Sony's retail dealers in this channel set their retail price such that they receive a Gross Margin of 15% on Sony 42" televisions.

Find:
(1) The retail price at which a Sony 42" television is sold in this channel. \$_______

(2) The \$ Gross Margin per unit received by the retail dealers in this channel.
\$_______

(3) The \$ Gross Margin per unit received by the wholesalers in this channel.
\$_______

(4) The Total Revenue per unit Sony receives in this channel.
\$_______

#2:
The following information is provided about Columbia Enterprises (CE). Data from CE's last fiscal year include:

Fixed Costs = \$2 million
Price = \$ 6.00
Unit Sales = 930,000 units
Variable Costs per unit = \$ 3.00

1. What were CE's dollar sales in the last fiscal year? \$_________________

2. What was CE's net profit in the last fiscal year? \$_________________

3. What was CE's Breakeven Point in units? __________________ units

CE plans to change its marketing tactics for the upcoming year. These will increase Fixed Costs to a total of \$2.5 million and will increase Variable Costs per unit by 15%.

1. What will CE's Breakeven Point in units be if price is held constant?
_______________ units

2. In order to achieve the same profit as the last fiscal year, what is the estimated quantity that will be required, given these costs?
_______________ units.

Solution Preview

See attached the completed solution.

#1:
Consider the following information about one of Sony's channels (and keep in mind that sales minus cost of goods sold results in \$ gross margin):

Sony's selling price (to its wholesalers) on a 42" television = \$600.
Sony's wholesalers in this channel set their wholesale price such that they receive a Gross Margin of 20% on Sony 42" televisions.
Sony's retail dealers in this channel set their retail price such that they receive a Gross Margin of 15% on Sony 42" televisions.

Find:
Solution:

Sony's selling price to the wholesalers = \$ 600
This selling price to the wholesalers is the cost price for them.

The selling price of the wholesalers is the cost price for the retailers.
Gross margin on wholesales = 20%

20S = (S -600)x100
20S = 100S - 60000
100S - 20S = 60000
80S ...

Solution Summary

The solution provides examples of calculating net profit, breakeven point, total revenue per unit, and gross margin per unit.

\$2.19