Completely Nuts Peanut Butter Wanted Analyze Results Recent Month Sales Southwestern Us Pl Q34300046

Completely Nuts Peanut Butter wanted to analyze their resultsfor their most recent month of sales in the Southwestern US. Theirplan and actual results were as follows:

MeasureMarch
PlanMarch
ActualDemand25,000,00026,100,000Share14.3%14.5%Marketing Exp.300,000$288,000Price$3.50$3.18Cost$1.70$1.50

What is the NMC variance (in 000s) for Completely Nuts?

Expert Answer

Answer:

• NMC = Net marketing contribution = (Volume * Margin) -MArketing expenses
• Where , Volume = Demand * Share
• Margin = Price – Cost

March Plan :

• Margin = Price – Cost = 3.5 – 1.7 = $1.80
• Volume = Demand *Share = 25,000,000 *0.143 = 3,575,000
• Marketing Exp = 300,000
• NMC Planned = (3,575,000*1.80) – 300,000 = $6,135,000

March Actual:

• Margin = Price – Cost = 3.18 – 1.5 = $1.68
• Volume =
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