Question

If the revenue attributable to a ski shop's radio ad is $30,000, the cost to develop and play the ad is $8,000, and the contribution margin typically averages 70%, what is the romi?

a. 357%.
b. 182.5% 54%.
c. 213%.
d. 162.5%.

Answer 1

The ROMI can be calculated by dividing the incremental revenue by the marketing cost. In this case, the ROMI is 375%.

Step-by-step explanation:

The ROMI (Return on Marketing Investment) can be calculated by dividing the incremental revenue by the marketing cost.

In this case, the incremental revenue is $30,000 (revenue attributable to the radio ad) and the marketing cost is $8,000 (cost to develop and play the ad).

The ROMI can be calculated as follows:

ROMI = (Incremental Revenue / Marketing Cost) * 100

ROMI = ($30,000 / $8,000) * 100

ROMI = 375%

Therefore, the correct answer is a. 357%.