West Electronics is a specialty instrumentation manufacturer for water treatment plants. They have developed a loyal following in North America for a line of their sensors that sells for $1490.
Fixed expenses are $234,200 per month. Variable expenses are $137 per unit.
If fixed costs rise by $12,500 and variable costs jump to $151, what is the change in the per unit margin (based on monthly sales of 200 units) expressed in percentage points? The selling price stays the same.
Please note that this short passage of English text requires at least six sets of calculations to get the right answer. Can you translate this English to frame the calculations properly?
Monday, September 24, 2012
Sunday, September 23, 2012
Solution to Contest #16
How much will it cost to run this test advertising campaign?
Each viewing of the ad will be seen by 5,784 (240,000 x 0.0241) people.
To get at least half million impression, it will need to be shown 87 times (500,000 / 5,784 and rounded up)
Total cost is $27,405 (87 x $315).
If the manufacturer's profit is $825 per car sold, how many cars must be sold just to pay for this advertising campaign?
The manufacturer needs to sell at least 34 cars ($27,405 / $825 and rounded up) more than its usual sales to pay for this advertising campaign.
Each viewing of the ad will be seen by 5,784 (240,000 x 0.0241) people.
To get at least half million impression, it will need to be shown 87 times (500,000 / 5,784 and rounded up)
Total cost is $27,405 (87 x $315).
If the manufacturer's profit is $825 per car sold, how many cars must be sold just to pay for this advertising campaign?
The manufacturer needs to sell at least 34 cars ($27,405 / $825 and rounded up) more than its usual sales to pay for this advertising campaign.
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