worksheet: How many Baseball Cards? Joe\'s Budget for cards: $18,500 Topps cards

Question

worksheet: How many Baseball Cards?

Joe's Budget for cards: $18,500

Topps cards are sold to a retailer only by the case.

A case contains 20 boxes.

A box contains 36 card packs.

Each box costs $30.00.

Each pack retails for $2.95.

Charlie sold 70% of Topps cards in full boxes.

Charlie sold 30% in individual packs.

Charlie sold 25 cases last year.

He expects a 7% increase in demand next year.

Fleer Ex cards are sold to a retailer only by the box.

Each box costs $125.

Each box retils for $179.

Each box contains 20 card packs.

Each pack retails for $8.95.

Charlie bought 20 boxes last year.

Customers buy Fleer EX cards in full boxes.

He expects a 5% increase in demand next year.

1. What was Charlie’s inventory cost this year? (Note: Topps cards are sold only by the case, so first calculate the cost of a case of Topps cards.)

2. Using Charlie’s growth projections of 7% for Topps and 5% for Fleer, how many cases or boxes do these projections indicate should be ordered?

3. If they ordered according to these growth projections, what would be the total cost of the order?

4. Joe wants to stay under the $18,500 budget. How should he adjust his order quantity to stay under budget and within the growth guidelines provided by Charlie?

5. If Joe recommends that they buy 26 cases of Topps and 21 boxes of Fleer EX cards, calculate the total potential revenue if all are sold according to the historical purchasing pattern for each type of card, which Charlie noted in the video.

Calculate the Total Net Profit.

Explanation / Answer

1. Inventory cost this year =

Topps cards = No. Of case * boxes per case * cost per box

= 25*20*30

= 15000

Fleer Ex = no. Of box * price per box = 20*125 = 2500

Total inventory cost = 15000+2500 = 17500

2. Cases for Topps cards = 25*(1.07) = 26.75 ~= 27

Boxes for fleer Ex= 20*(1.05) = 21

3.

Inventory cost total =

Topps cards = No. Of case * boxes per case * cost per box

= 27*20*30

= 16200

Fleer Ex = no. Of box * price per box = 21*125 = 2625

Total inventory cost = 16200 + 2625 = 18825

4. The budget is exceeded by 18825-18500 = 325

So, either he should order one Topps cards case less or try to get the Topps cards in boxes.

5. For 26 cases of Topps cards = (No. of cases * box per case * pack per box * selling price of pack - (No. of cases * box per case * cost per box)

= (26*20*36*2.95 - 26*20*30)

= 39624

For 21 boxes of fleer ex cards = (No. of boxes * pack per box * selling price of pack - (No. of box * cost per box)

= (21*20*8.95 - 21*125)

= 3234

So, net profit = 39624 + 3234

= 42858

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