# Marketing Essentials

## Unit 10: Product and Service Management

### Math Workout

1
ABC Company has 5 lines of toys: games, books, bikes, dolls, and cars. Each line has 6 products. Games and books make up 25% each of the revenue; bikes make up 40%; and dolls and cars make up 10% combined. If each product within a line has about the same revenue, and the total revenue for all 5 lines is \$783,000, how much does the Alphabet Game product make in revenue?
A)\$16,313
B)\$32,625
C)\$52,200
D)\$6,525
2
You have developed a new product for your company and are assessing risk. You expect that it will cost about \$22,750 to produce and sell 6,500 of the product, and you plan to price it at a 40% markup. How many do you need to sell before you begin to make a profit?
A)2,600
B)6,500
C)4,643
D)9,100
3
In order to jump-start sales of a new lotion, a company has decided to include a free sample of the product with each bottle of shampoo it sells. The shampoo has a cost of \$2.33 and it retails for \$6.59. The cost of producing the free samples will be \$5,390 for 10,000. What will be the profit margin for each bottle of shampoo that includes a free sample of lotion?
A)\$3.72
B)\$1.13
C)\$4.26
D)\$0.54
4
Your boss has decided to recommit to a product that is declining in sales. Last month 2,500 items were produced at a cost of \$45,000, but only 1,000 items sold at a 30% markup on cost. She would like you to find a way of marketing the product so that it makes at least \$10,000 in profit on the sales of 2,500 items. By how much can you lower the retail price to accomplish the goal?
A)\$10.04
B)\$1.40
C)\$4.00
D)\$5.40
5
A supermarket sells 2,795, 33-ounce containers of laundry detergent from May to September. The profits made on the markup of the different brands were as follows: \$3,988.16 on Brand A for 824 containers, \$3,438.40 on Brand B for 614 containers, \$3,235.05 on Brand C for 819 containers, and \$3,206.48 on Brand D for 538 containers. Based on this information, which do you think is the generic brand?
A)Brand A
B)Brand B
C)Brand C
D)Brand D
6
In order to make the packaging for a product more visually appealing you would like to redesign the label, which will cost approximately \$6,500. You would also like to provide information to the consumer about nutrition on the label. Research and development for this will cost about \$9,600. Finally, you would like to use more recycled material in the packaging. This will cost five cents more per item sold. Although the company will be incurring these new costs, you expect sales to go up by 20%. If you sold 8,500 of this item last year at \$35.99 retail with total costs of \$183,525, how much more will the company make this year if the retail price stays the same and your predictions are correct?
A)\$8,220.00
B)\$23,980.00
C)\$53,303.00
D)\$7,880.00
7
You find the following information on the label of a cereal box comparing a 2000-calorie diet and a 2,500-calorie diet:
 2,000 2,500 Total fat 65g 80g Sat fat 20g 25g Cholesterol 300mg 300mg Sodium 2,400mg 2,400mg Potassium 3,500mg 3,500mg Total Carbohydrates 300g 375g Fiber 25g 30g

How many grams of fat, cholesterol, sodium, potassium, and carbohydrates combined should a person on a 2,500-calorie diet have in a day?
A)516.2
B)6,710.0
C)6,610.0
D)461.2
8
You are planning on purchasing a car, but you can’t decide weather to get the five-year warranty or the 7-year extended warranty. The total cost of the car will be \$14,995 or \$17,459 respectively. You have to drive a lot for work, and you typically travel about 15,000 miles a year. If you plan to own the car for ten years, how much more will you spend per mile for the 7-year warranty?
9
After a year you finish paying off your credit card debt. You calculate that you ended up spending 17.4% more than the total cost of the items you bought in finance charges. If you paid the credit card company \$2,367 in all, how much of that money was finance charges?
A)\$350.82
B)\$411.86
C)\$277.89
D)\$701.63
10
A couple is working with a mortgage company to finance the new house they would like to buy. The mortgage broker tells them that with a 5.625% interest rate their monthly payments will be \$650.49 over thirty years. If price of the house was \$123,000, and they made a down payment of \$10,000, how much will they have paid in interest over the thirty years?
A)\$116,081.25
B)\$106,643.75
C)\$121,176.40
D)\$221,003.98