[Solved] What is the breakeven point in dollar sales volume?

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[Solved] What is the breakeven point in dollar sales volume?

Directions: Select the best response for each. Please post your selections in the Blackboard response section numbered 1-30 with response to each corresponding question.

Concession Supply sells hotdogs, buns, and nacho ingredients to several major league ballparks across the country. Currently, Concession Supply has the following pricing information for one case of hotdogs sold at Wrigley Field: Total fixed costs = $1,200, Selling price = $16, and Variable costs = $6.

1. Refer to Scenario 12.1. To break even, Concession Supply should sell ____ cases of hot dogs per day at Wrigley Field.

a.

13

b.

120

c.

40

d.

200

e.

60

2. Refer to Scenario 12.1. What is the breakeven point in dollar sales volume?

a.

$1,200

b.

$1,440

c.

$3,000

d.

$1,920

e.

$1,600

3. Refer to Scenario 12.1. If Concession Supply increased its price by 10 percent and experienced only a 2 percent decrease in the demand for hotdogs, the demand would be

a.

inelastic.

b.

common.

c.

prestige.

d.

elastic.

e.

marginal.

4. Refer to Scenario 12.1. If Concession Supply wanted to make a profit of $800 on each case, it would need to sell ____ cases.

a.

150

b.

300

c.

100

d.

75

e.

200

Scenario 12.2

Use the following to answer the questions.

The BASF Chemical Company in Germany has developed a new rubberized coating. The product has an application for cell phones and other hand-held electronic devices that gives them protection from falls and scratches. BASF plans to market the product directly to businesses that manufacture the casings for these types of products. BASF currently uses a system of salespeople headquartered in Germany, while its primary business customers are in China.

5. Refer to Scenario 12.2. BASF has decided to offer discounts to its businesses customers in the form of the following: For each order of $100,000 or more during the next 90 days, the buyer will receive a rebate of 5 percent. This type of pricing would be an example of ____ discounts.

a.

allowance

b.

cash

c.

seasonal

d.

noncumulative

e.

cumulative

6. Refer to Scenario 12.2. BASF is considering the problem of actual distance in delivering its product from the plant in Germany to some of its customers in China. Which pricing strategy would help overcome this problem?

a.

Geographic

b.

Transfer

c.

Commercial

d.

Transit

e.

Factory

7. Refer to Scenario 12.2. If BASF were to employ pricing that includes the price at the factory plus freight charges from a chosen point nearest the buyer, this would be an example of ____ pricing.

a.

factory plus

b.

dispersion

c.

base-point

d.

freight absorption

e.

uniform geographic

8. Refer to Scenario 12.2. If BASF were to price its product in barrels from the factory, before it is loaded on the carrier, this would be an example of ____ pricing.

a.

buy-back allowance

b.

geographic

c.

F.O.B destination

d.

F.O.B. factory

e.

base-point

Scenario 13.1

Use the following to answer the questions.

Suppose that Ray-Ban is considering a new line of sunglasses that would be sold in major department stores. The new line would be positioned as a more distinctive brand than the typical glasses sold through department stores, and would be priced higher than other brands in the store, but a lower price line than the current Ray-Ban lines that are sold through more selective stores. In determining the price for this sunglass line, Ray-Ban wants to gather information about all brands sold in department stores and about customers’ perceptions of those brands.

9. Refer to Scenario 13.1. Ray-Ban’s plan of gathering information about the other brands sold in department stores, including their prices, would most likely be used in a ____ basis for pricing.

a.

Cost

b.

Competition

c.

Demand

d.

Customer

e.

Market

10. Refer to Scenario 13.1. Given Ray-Ban’s plan for positioning the new sunglass line, they should use a ____ strategy when introducing their new product.

a.

promotional

b.

penetration

c.

price-skimming

d.

reference

e.

secondary-market

11. Refer to Scenario 13.1. Ray-Ban has decided to promote the new sunglass line as an “affordable luxury” and plans significant promotional expenditures. With these objectives, which of the following should Ray-Ban use to price its product line?

a.

competition-based pricing

b.

cost-plus pricing

c.

markup pricing

d.

demand-based pricing

e.

differential pricing

12. Refer to Scenario 13.1. If Ray-Ban selected the prices for its new sunglasses to be $60, $70, or $80, this would most likely be an example of using ____ pricing to enhance its distinctive positioning strategy.

a.

product-line

b.

odd-even

c.

professional

d.

promotional

e.

penetration

Scenario 13.2

Use the following to answer the questions.

Glenwood Pet Hospital is considering implementing a new pricing strategy for its veterinarian services. After reviewing the previous three years’ revenue, Glenwood finds that most of its customers bring their pets in for the required annual vaccinations and then only if the animal is ill. Glenwood’s objective is to generate more income per customer on an annual basis. The hospital has previously priced its services by charging a flat fee for the office visit, a fee for each vaccine, and a fee for each type of examination beyond the basic office visit. Most customers pay the flat office fee and a fee for a rabies vaccine. Glenwood is now considering a new plan where the pet owner would pay one fee that would cover an office visit, the required rabies vaccine, and additional vaccines that prevent heartworm, kennel-cough, and fleas. Glenwood hopes to encourage the pet owners to view their pet’s health as part of a prevention program, rather than a one-time annual visit.

13. Refer to Scenario 13.2. Glenwood’s previous pricing strategy is an example of ____ pricing, while the new strategy is an example of ____ pricing.

a.

percentage; cost-based

b.

cost-based; psychological

c.

sales-based; customary

d.

a la carte; bundle

e.

demand-based; bundling

14. Refer to Scenario 13.2. Glenwood has decided that it is going to offer a special package offer if the prevention plan is purchased within the first 30 days of each year’s time for vaccinations. This type of pricing strategy would be an example of

a.

customary pricing.

b.

secondary-market pricing.

c.

introductory pricing.

d.

periodic discounting.

e.

random discounting.

15. Refer to Scenario 13.2. Glenwood’s closest competitor, The Hearthstone Pet Hospital, currently charges $60 for each basic office visit. If Glenwood were to price its basic office visit at $45, it would most likely be employing which of the following?

a.

customary pricing.

b.

penetration pricing.

c.

prestige pricing.

d.

price skimming.

e.

cost-based pricing.

16. Refer to Scenario 13.2. Glenwood is considering a markup pricing basis, with the cost for office visit plus vaccines at $45. If Glenwood were to add a markup of 33.3 percent of the costs, its price would be ____.

a.

$79

b.

$65

c.

$55

d.

$78

e.

$60

MULTIPLE CHOICE

17. The oldest form of exchange¾trading of products¾is known as

a.

credit.

b.

buying.

c.

purchasing.

d.

barter.

e.

pricing.

18. What do all of the following have in common: tuition, fee, premium, retainer, dues?

a.

They all must be paid in cash.

b.

They are forms of exchange similar to, but not identical with, money.

c.

They are forms of exchange similar to, but not identical with, barter.

d.

They are different terms for the concept of price.

e.

They have nothing in common.

19. The tuition and fees each student paid for this semester of college are both terms for

a.

expenses.

b.

charges.

c.

bills.

d.

price.

e.

exchange valuations.

20. Which of the following is the most flexible variable in the marketing mix?

a.

Product

b.

Price

c.

Advertising

d.

Personal selling

e.

Distribution

21. What equation shows organizations the relationship between price and profit?

a.

Total Variable Costs + Total Fixed Costs = Sales- Profit

b.

Price = Profit per Item´ Number of Units Sold

c.

(Price´ Quantity Sold)- Total Costs = Profits

d.

(Price- Profits)´ Total Costs = Sales

e.

Total Costs = (Price´ Quantity Sold)- Profits

22. Price is a key element in the marketing mix because it relates directly to

a.

the size of the sales force.

b.

the speed of an exchange.

c.

quality controls.

d.

the generation of total revenue.

e.

brand image.

23. Price is

a.

money paid in a transaction.

b.

not important to buyers.

c.

of limited interest to sellers.

d.

the most inflexible marketing mix decision variable.

e.

the value that is exchanged for products in a marketing transaction.

TRUE/FALSE

24. The six stages of setting prices should always be followed if prices are to be set correctly.

25. A marketer uses only one pricing objective to avoid organizational confusion.

26. Pricing objectives should be considered overall goals to aid the organization in its long-range plans.

27. The objective of profit maximization is rarely operational because its achievement is difficult to measure.

28. The objective of maintaining or increasing market share depends on growth in industry sales.

29. The use of market share as a pricing objective oversimplifies the value of price in contributing to profits.

30. Knowing the target market’s evaluation of price allows the marketer to know how much emphasis to place on price and how to price a product relative to competition