Assignment task: Manel Inc. will introduce its new natural air freshener, Bayer, next year. It is estimated that Bayer will capture 10% percent of the 30 million unit market. Bayer's retail price is $9.50. Manufacturing costs for Bayer include $0.75 for material and $0.25 for labor per unit. overhead costs are expected to be $1,390,000 per year. Brand manager's salary and expenses total $114,000. Salespeople are paid entirely by a 11.5 percent commission. Shipping costs, breakage, insurance, and so forth are $0.19 per unit. The advertising budget for Bayer is $2,960,000.
While wholesalers take a 11 percent markup on price, retailers will receive a margin of 27 percent. Please answer the following questions:
1. At what price will the company be selling its product Bayer?
2. What is the contribution per unit for Bayer?
3. What is the break-even unit volume in the first year?
4. What is the first-year break-even share of market?
5. What is the markup% on price for Bayer?
6. What is the markup% on cost for the wholesaler?
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