EssayClub.com - Free College Essays and Term Papers

Marketing Analysis

the information that can be obtained from the profit-and-loss statement are:
1) Summary of cost and revenues of the company over a time period
2) Analyze profitability

Ques 2   :       Develop a profit-and-loss statement for The Flying Carpet Company, a retail store, based on the following:
Beginning inventory (at cost) $700,000
New merchandise (at cost)   800,000
Ending inventory (at cost)   600,000
Gross sales   2,100,000
Returns and allowances   200,000
Marketing expenses   400,000
General expenses   300,000
Ans 2   :     Gross sales: 2,100,000.00
                  Returns and allowances 200.000
                  Total sales deduction   200,000.00
Net sales 1,900,000.00
Less: Cost of Goods Sold
Beginning inventory (at cost) 700,000
New Merchandise (at cost) 800,000
Merchandise Available for Sale               1,500,000
Ending inventory (at cost)   600,000
Total Cost of Goods Sold     900,000.00
Gross Margin 1,000,000.00
Less Operating Expenses
Marketing expenses 400,000
General expenses 300,000
Total Operating Expenses         700,000
Net Profit Before Taxes       $300,000

Ques 3:   A wholesaler estimates that it can sell 11,000 CD players at $100 each or 7,500 at $135 each. The CD                               players cost the wholesaler $70 each.
a. Calculate the price elasticity between the $100 and the $135 price levels
b. What factors should determine the price to be set?
Ans3:  
A:Priceelasticity: Quantity 1 – Quantity 2
Quantity 1 + Quantity 2
Price 1 – Price 2
Price 1 + Price 2

Price elasticity: 11000 – 7500
              11000+ 7500
100 – 135
100 + 135

=1.27
B:     It depends on the marketing philosophy. At a price of $135, profit will probably be higher because the firm needs to produce and sell fewer products, thus reducing costs. At a price of $100, more units are sold; this may increase...