Question

Hanna Alger has just been promoted to the position of Brand Manager for Brand K. Brand K is a consumer product with a retail price of $10.00. Retail margins on the product are 35%, while wholesaler margins are 20%. Variable manufacturing costs for Brand K are $2.20 per unit. Fixed manufacturing costs = $4,200,000. The advertising budget for Brand K is $1,675,000. Brand K’s Brand manager salary totals $125,000 per year. Brand K’s salespeople are paid entirely by commission, which is 10% of the dollar sales they make. Shipping costs, breakage, and handling costs total $0.02 per unit. In 2022, Brand K and its direct competitors sold a total of 20 million units for the year; Brand K had a 15% share of this market

Answer 1

Answer: To analyze the financial performance of Brand K, you can calculate various metrics such as revenue, costs, and profitability. Additionally, you can compare these metrics with industry benchmarks or previous years' performance to evaluate Brand K's success and identify areas for improvement.

Step-by-step explanation:

As the Brand Manager for Brand K, Hanna Alger is responsible for overseeing the brand's performance and making strategic decisions to maximize its profitability. To analyze the financials of Brand K, let's break down the various costs and revenue components:

1. Retail Price: Brand K's consumer product is priced at $10.00 per unit.

2. Retail Margin: The retail margin is the difference between the retail price and the cost of goods sold (COGS) at the retail level. In this case, the retail margin is 35% of the retail price. So, the retail margin for Brand K is $10.00 * 35% = $3.50 per unit.

3. Wholesaler Margin: The wholesaler margin is the difference between the wholesale price and the COGS at the wholesale level. In this case, the wholesaler margin is 20% of the retail price. So, the wholesaler margin for Brand K is $10.00 * 20% = $2.00 per unit.

4. Variable Manufacturing Costs: The variable manufacturing costs are the costs that vary with the number of units produced. For Brand K, the variable manufacturing cost is $2.20 per unit.

5. Fixed Manufacturing Costs: The fixed manufacturing costs are the costs that do not vary with the number of units produced. For Brand K, the fixed manufacturing cost is $4,200,000.

6. Advertising Budget: Brand K has an advertising budget of $1,675,000.

7. Brand Manager Salary: Hanna Alger's annual salary as the Brand Manager for Brand K is $125,000.

8. Salespeople Commission: Brand K's salespeople are paid a commission of 10% of the dollar sales they make.

9. Shipping, Breakage, and Handling Costs: These costs amount to $0.02 per unit.

10. Market Share: Brand K's market share in 2022 was 15% of the total market, which sold a total of 20 million units for the year.

To analyze the financial performance of Brand K, you can calculate various metrics such as revenue, costs, and profitability. Additionally, you can compare these metrics with industry benchmarks or previous years' performance to evaluate Brand K's success and identify areas for improvement.