Financial Analysis
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Category:
Marketing
Subcategory:
Financial Analysis
Level:
Academic
Pages:
5
Words:
1069
Coursework Sample: After changing both values of retail as well as for wholesale margin by increasing the values. It was evident that if and only if the retail value is fixed at $1.00 and the margin of retail and wholesale are increased the selling price of the manufacturer decreases. As I increased the values of wholesale and retail margin, I increased the values with a range 1% to 25%, and I realized that with any increase there is a decrease in the selling rate of the manufacturer. Consequently, if an organization rises the values for retail and wholesale margin, the profit obtainable to the organization also increases as it is premeditated by the retail price. On the same note with no changes on the retail value as it remains static the manufacturer is forced to decrease its selling charge for extra benefits to the wholesaler and the retailers. The manufacturer selling price decreases with increase in wholesale and retail margin as cost and margin must add up to equal the set of the selling price. Therefore if one have to increase the wholesale and retail margins, one have to decrease the selling price of the manufacturer to equal the retail price. From research and after studying the case study, in my opinion, unit contribution denotes a portion of the total sales revenue that is not in any way consumed by the variable cost and hence contribute to the fixed costs coverage. In other words unit, a contribution may be termed as the contribution to the total profit that each unit sale has. As always unit contribution is less than the wholesale selling price as it is the total gain left after some of the variable cost such as manufacturing and shipping are assessed. For profitability to exist high unit contribution is preferred as this implies that variable cost is relatively lower and thus every unit contribute more and thus profit. An increase in wholesale and retail margins affects unit contribution as an increase in these margins also decreases unit contr...
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