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midterm pratice.docx

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Retail Management
RMG 301
Norman Shaw

RMG301 Decision Making Problems – Practice Sheet Productivity, Breakeven, Stock Turns The Mid Term will have questions similar to these. I shall provide an answer sheet in the next couple of days. My advice is that you try on your own and check your answer once you complete the question. Help is available: There are great resources via the Internet Me: phone me (416-893-1980), email me or come to my office TRS3-040 Our TA; Samantha Simons, email [email protected] Word of advice: Practice, practice, practice # Question Answer 1. A new product is being considered that will require $45,000 $18.35 in fixed costs per year. Variable costs per unit are estimated to be $12.72. The firm wants to break even if 8000 units are produced and sold per year. What should be the price? 2. A new luxury soap is to be introduced to the market. The 1,000,000 $100,000 advertising campaign will cost $500,000. Each bar of soap costs $1 and is sold for $1.50. a. What is the breakeven quantity? b. 1,200,000 bars of soap are sold. What is the profit? 3. $36,000 The break-even quantity for a certain kitchen appliance is 6000 units. The selling price is $10 per unit, and the variable cost is $4 per unit. What must be the fixed cost to break even at 6000 units? 4. 1.9 At the beginning of the year, the inventory of perfume is $ 27.5 wks 60,000 . At the end of the year, the inventory is $ 50,000 . Sales are an average of $ 2,000 per week. a. What is the stock turn? b. How frequently is your stock turning, measured in weeks? # Answer Question 5. Joe operates 3 hardware stores. Store 1 is 2,200 sq ft. Store 3,000 sq ft 2 is 2,700 sq ft. Store 3 is 4,100 sq ft. Total annual sales are $500 per sq $ 4,500,000
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