A leading manufacture of exercise bicycles ran a full-page advertisement in a he

Question

A leading manufacture of exercise bicycles ran a full-page advertisement in a health magazine differentiating the price of its bicycle with that of a leading competitor. The manufacturer is using comparative advertising reminder-oriented advertising a pushing strategy advocacy advertising When a pharmaceutical company uses the phrase "ask your doctor" in its ads, the company is using a strategy to appeal directly to the public instead of physicians alone. pulling public relations rebate pushing Assume a product costs $5. The variable cost per unit is currently $4, and the fixed cost is $25,000. If the company can alter its production method such that the variable costs fall to $3.50 and the fixed costs rise to $30,000, what will happen to the breakeven point? It will rise and fall later. It will rise. It will remain the same. It will fall. is the process by which an employee accrues non-forfeitable rights over employer provided stock options. Time in service Promotions Vesting Centralized decisions

Explanation / Answer

19. (a) The manufacturer is using Comparative Advertising as he is trying to convince the prospective customers to buy his product as against his competitor's. He is trying to gain a competitive advantage by highlighting the price of his bicycle and comparing it with his competitor's.

20. (a) The company is using a Pulling Strategy as it is trying to convince the target customers that even doctors are in favor of their product and is trying to pull the prospective customers towards its products.

21. (d) The Breakeven point will Fall

          Sales Price = $ 5 per unit

          Variable Cost = $ 4 per unit

          Contribution =$ 1 per unit

          Fixed Cost = $ 25,000

          Breakeven Point = Fixed Cost / Contribution per unit

                                  = $ 25,000 / $ 1

                                  = 25,000 units

          If Variable Cost = $ 3.50 per unit, Sales pice remaining same

          Then Contribution = $ 1.50 per unit

          Also, Fixed Cost = $ 30,000

          Then Breakeven Point becomes = $ 30,000 / $ 1.50 = 20,000 Units

          i.e. we can say that the Breakeven Point falls

22. (c) Vesting is the process by which an employee accrues non-forfeitable rights over employees provided stock options. In other words, we can say that once the employee stock options vest, it is at option of the employee whether he wants to exercise his stock options or not as he has fulfiled the criteria of continuous service to the organisation for a specified period.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

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