question archive EasyFind manufactures and sells golf balls
EasyFind manufactures and sells golf balls
Subject:FinancePrice:2.86 Bought3
EasyFind manufactures and sells golf balls. The company is conducting a price test to find a better price point. Presently their golf balls sell for $23 per dozen. Their current volume is 5,370 dozen per month. They are considering reducing their sales price by 23% per dozen.
CALCULATED VARIABLES:
newvol = 9,054
newunits = 6,974
newucont = $7.71
newprice = $17.71
tcont = $69,810
revenues = $123,510
What % increase in unit sales is necessary to achieve the same level of total contribution?
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Answer: 68.60%
sales volume = 5370
total contribution = 5370 * (23-10) = 69810
new contribution per unit = (17.71 - 10) = 7.71
new volume required for same total contribution = (69810 / 7.71) = 9054
increase in sales volume = (9054 - 5370) = 3684
% increase necessary to achieve same level of contribution = (3684 / 5370) * 100 = 68.60%
