The questions below relate to the following scenario : Jersey Manufacturing uses

Question

The questions below relate to the following scenario:

Jersey Manufacturing uses a distribution channel that includes wholesalers to retailers to ultimate consumer. The Jerome Widget 1000 is priced to wholesale at $250.00. Jersey earns a 30% margin on each Widget 1000 unit. Jersey’s wholesalers markup each unit $75.00. Retailers typically charge $700.00 to customers during peak season for a Widget 1000, but the unit can be priced by retailers as low as $650.00 off season.

8. What is the typical GPM% for Retailers in peak season and what is the corresponding markup on cost percentage?

9. What is the GPM% for Retailers who charge the lowest stated price in off-season and what is the corresponding markup on cost percentage?

Explanation / Answer

Jersey Manufacturing Details Amt $ Jersey price to wholesaler                      250 Jersey Margin 30% Jersey cost price                      192 Wholesaler price to reatiler                      325 Retailers' Peak season price                      700 Peak season profit of retailer                      375 GPM for retailer peak season= 115% Margin over cost to Jersey                      450 Mark up on cost peak season 180% Retailers off season price                      650 Off season profit of reatiler                      325 GPM for retailer off season= 100% Margin over cost to Jersey                      400 Mark up on cost off season 160%

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.