Cool Beans is a locally owned coffeeshop that competes with two large coffee cha
ID: 336501 • Letter: C
Question
Cool Beans is a locally owned coffeeshop that competes with two large coffee chains, PlanetEuro and Frothies. Alicia, the owner, always creates a marketing plan for her business. For the past year, her plan estimated that Cool Beans would sell 207,000 drinks at an average price of $3.24per serving. Her expected average variable cost per serving was $1.43. She had planned several marketing initiatives at a total cost of $36,000. At the end of the year, she totalled 212,000 drinks served out of a total market of 1,700,000. Unexpectedly, her planned net marketing contribution (NMC) was within $20 of her actual NMC, effectively, no variance.
If actual marketing expenditures were the same as planned, what was the actual average unit margin for Cool Beans?
Cool Beans is a locally owned coffeeshop that competes with two large coffee chains, PlanetEuro and Frothies. Alicia, the owner, always creates a marketing plan for her business. For the past year, her plan estimated that Cool Beans would sell 207,000 drinks at an average price of $3.24 per serving. Her expected average variable cost per serving was $1.43. She had planned several marketing initiatives at a total cost of $36,000. At the end of the year, she totalled 212,000 drinks served out of a total market of 1,700,000. Unexpectedly, her planned net marketing contribution (NMC) was within $20 of her actual NMC, effectively, no variance. If actual marketing expenditures were the same as planned, what was the actual average unit margin for Cool Beans? 0.00 dollars and cents ($) Submit Answer Exit CALCULATED VARIABLES: pnmc $338,670 pgross $374,670 pmargin $1.81 PS4 4Explanation / Answer
In units Total for sale of 212000 units Total market size 1700000 Cool Beans sale 212000 % of market 12.47% Average price SP per serving in $ 3.24 686880 Average variable cost per serving in $ 1.43 303160 Gross profit of $ 1.81 383720 Net profit in $ (Gross profit-marketing expense) 1.64 347720 Total marketing expense in $ 36000 Marketing expense per unit 0.17 NMC in $ 20 Average actual unit margin (Total selling price-variable cost-marketing expense) in $ 1.64 NMC =AVERAGE ACTUAL COST 1.64 *%OF TOTAL MARKET WHICH IS 12.47% 20.45