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1.

Given Marine Band harmonica retail price was €30 which includes 33% margin, distributers price should be €30/1.33=€22.556 which 12% margin. Thus Hohner’s selling price =€22.556 /1.12=€20.140
Fixed Costs
A. Manufacturing fixed cost € 900,000.000
B. Advertising budget € 500,000.000
C. Salary € 35,000.000
Total Fixed Cost (A+B+C)t € 1,435,000.000

Variable Costs
A. Manucturing variable cost € 2.700
B. Logistic € 0.600
C. Sales commission (10% of selling price) € 2.014
Total Variable Cost (A+B+C) € 5.314

The unit contribution is
Unit contribution _= Price/Variable cost €20.140 /€ 5.314=
€ 14.826
Unit contribution is € 14.826

2.

Break even point = Tot fixed costs/ (price-variable costs) € 1,435,000/(€20.140-€ 5.314) = 96,792 units
Break even point is 96,792 units

3.
Given that the total market is 800,000 units, the market share for Hohner at breakeven point is 96,792 units *100/ 800,000 = 12.099%
The market share Hohner needs to break even is 12.099%

4.

Hohner’s market share is 75% of 800,000 so this year it sold 600,000 units.

Sold this year (75%*800,000) 600,000.000 units
Revenue (600,000 units* €20.140 price per unit) €12,083,780.881
Total Fixed Cost € 1,435,000.000
Tot Variable Cost € 5.314
Profit Revenue-(Total Fixed + Total Variable Cost*Unit Sold) € 7,460,402.793
Hohner’s profit is € 7,460,402.793

5.

a.
New Fixed Costs
D. Manufacturing fixed cost € 900,000.000
E. Advertising budget € 1,000,000.000
F. Salary € 35,000.000
Total Fixed Cost (A+B+C)t € 1,935,000.000

Variable Costs
D. Manucturing variable cost € 2.700
E. Logistic € 0.600
F. Sales commission (10% of selling price) € 2.014
Total Variable Cost (A+B+C) € 5.314

Break even point = Tot fixed costs/ (price-variable costs) € 1,935,000/(€20.140-€ 5.314) = 130,517 units

b.
€ 7,460,402.793 = Total revenue – Total cost
= (€20.140*units) – € 1,935,000.000 – (€ 5.314*units) =
=;(€ 7,460,402.793+€ 1,935,000.000)/ (€20.140-€ 5.314) = 633,725.286 units
Hohner to achieve the same profit must sell 633,725.286 units

c.

For the profit to same of last year € 7,460,402.793 Hohner will sell 633,725.286 units. Given that the new market of 900,000 units, the market share for Hohner is
633,725.286 units *100/ 900,000 = 70.414%
Hohner’s market share be next year must be = 70.414%

6.
a.

Given Marine Band harmonica retailed for €30 to includes 40% margin, distributers price will be €30/1.40=€21.429 which includes 12% margin. Thus Hohner’s selling price =€21.429 /1.12=€16.112

Fixed Costs
G. Manufacturing fixed cost € 900,000.000
H. Advertising budget € 500,000.000
I. Salary € 35,000.000
Total Fixed Cost (A+B+C)t € 1,435,000.000

Variable Costs
G. Manucturing variable cost € 2.700
H. Logistic € 0.600
I. Sales commission (10% of selling price) € 21.611
Total Variable Cost (A+B+C) € 4.911

Unit contribution _= Price/Variable cost €16.112 /€ 4.911=
€ 11.201

Break even point = Tot fixed costs/ (price-variable costs) € 1,435,000/(€16.112 /€ 4.911) = 128,119
units

Hohner to break even needs to sell 128,119 units

b.
€ 7,460,402.793 = Total revenue – Total cost
= (€16.112 *units) – € 1,435,000.000 – (€ 4.911*units) =
=;(€ 7,460,402.793+€ 1,435,000.000)/ (€16.112-€ 4.911) = 794,194.309 units
Hohner to achieve the same profit must sell 794,194.309 units

c.
For the profit to same of last year € 7,460,402.793 Hohner will sell 794,194.309 units. Given that the new market of 900,000 units, the market share for Hohner is
794,194.309 units *100/ 900,000 = 88.244%
Hohner’s market share be next year must be = 88.244%