Marketing 300 Exam 2 - Pricing Formulas – Questions & Answers

Marketing 300 Exam 2 - Pricing Formulas –
Questions & Answers
Your COST = $22.40 , and your price must include a 20% mark up where the markup is
based on the SELLING PRICE(not the cost). What is the suggested selling price? - -Markup
based on SELLING PRICE is:
Cost Price = (1 - Markup %)*(Selling Price)
$22.40 = 0.8(x)

****(your COST is 80% of $ selling price)

$22.40/0.8 = (x)
$28.00 = (x) = Selling Price



Math check: $28.00 - 22.40 = $5.60
$5.60/$28.00 = 20% (your given mark up percentage!)

-Average Total Cost (ATC) - -TC/Q

-Average Variable Cost (AVC) - -TVC/Q

-Average Fixed Cost (AFC) - -TFC/Q

-Breakeven Point (in units) - -total fixed costs / (sales price - VC per unit)

-Breakeven Point (in dollars) - -Breakeven (in units) x sales price

-Contribution Margin - -sales price - variable costs per unit

-Retailer (sales price based) - -(Retail Selling Price - Wholesaler Selling Price) / Retail
Selling Price = Margin %

-Retailer (cost based) - -(Retailer Selling Price - Wholesaler Selling Price) / Wholesaler
Selling Price = Margin %

-Is Wholesaler Selling Price the same as Retailer Cost price?
Is Manufacturer Selling Price the same as Wholesaler Cost price? - -Yes!

-Manufacturer (Sales price based) - -(Manufacturer Selling Price - Manufacturer Cost
price)/ Manufacturer Selling price = Margin %