glucose monitoring watch question, Help needed please! An estimated $83.70 will
ID: 2458467 • Letter: G
Question
glucose monitoring watch question, Help needed please!
An estimated $83.70 will be the cost to produce a watch.
total market category (TAM) in China is 98.4 million, India has 65.1 million and the United States carries 24.4 million. The served market (SAM) will be calculated to be estimated 48.2 million, 33 million and 12.2 million for China, India, and the United States respectively.
Mark up for retail or sales price for service
Mark up Calculation for first year retail sales $83.70 product manufacturing cost with a 60% markup will yield a $133.92 Retail sales price.
Therefore a more realistic 50% of the TAM puts the market share potential within 20% aggressive start up goal.
Please help determine Pro forma profit/loss for the first year. Please show all steps in calculating the information
Explanation / Answer
Proforma Profit and Loss for the first year of Glucose Monitoring Watch (All values in $, unless otherwise specified) Cost per watch 83.7 Markup @ 60% thereon 50.22 Retail Sales Price per watch 133.92 Sales Expected @ 50% of TAM (Units in million) China 49.2 India 32.55 USA 12.2 Served Markets (SAM) China 48.2 India 33 USA 12.2 Sales are to be calculated on the basis of Served Markets and not expected Markets Accordingly, (Values in $ million, units in million) China India USA Total No. of watches sold 48.2 33 12.2 93.4 Sale Value @ $ 133.92 per 6454.94 4419.36 1633.82 12508.13 Cost @ $83 per -4000.60 -2739.00 -1012.60 -7752.20 Profit on totality basis 2454.34 1680.36 621.22 4755.93
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