marketing

Q#1: Assume that TexCo is a widget manufacturer. It costs TexCo $62 (parts and labor) to manufacturer each unit, and it incurs fixed overhead of $2.5 million per year.  If TexCo prices the widgets using a 40% markup on cost, how many widgets must it sell annually in order to break even? Show your work?

Q#2: Based on your answer to #1, if TexCo actually sells 150,000 units this year, what will its net profit be? Show your work.

Q#3: Flip’s Flops, a small retailer located in South Padre Island, purchases “Sea Turtle” brand flip flops at a cost of $12 per pair.  If the manager prices the flip flops using a 60% “markup on price”, what is the selling price to consumers?

Q#4: Assume that it is nearing the end of the summer, and the Flip’s Flops still has a large number of “Sea Turtle” flip flops in the store.  If the manager marks the price of the flip flops down by 40%, what is the new selling price of this item?

Q#5: Peaks is a snowboard manufacturer, and is working on a new, high-end board to sell to retail stores.  These boards will have a suggested retail price of $749. If Peaks knows that these retailers price their boards using a 50% "markup on retail", and Peaks wants to be able to achieve a 60% "markup on cost", what is the most that it can spend, per unit, to produce this board?