# INSTITUTE OF MANAGEMENT TECHNOLOGY HYDERABAD CASE STUDY ON “Classic Knitwear and Guardian

CASE STUDY ON
“Classic Knitwear and Guardian:A Perfect Fit?”
Submitted by
Submitted to – Dr. Rambalak Yadav
Date – 1st October 2018
Q4.What sales volume to break even on classic’s 2year launch period?

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MARKETING PLAN
Year 1;2 Year 1
Year 2
Displays(\$100 x 10,000) \$1,000,000 \$5,00,000 \$5,00,000
sales representatives
(3 x 2years x\$85,000) \$510,000 \$255,000 \$255,000
licensing fee \$100,000 \$100,000 –
TOTAL \$2,810,000 \$1,455,000 \$1,355,000Analysis
From exhibit 4:
Year1 Year2
Mfg selling price(MSP) \$17.87 \$17.87
COGS \$10.82 \$10.82
5% of MSP \$0.89 \$0.89
Advertising allowaness(20% x \$17.87 X 10%) \$0.36 \$0.36
Royalities5% x \$17.87 for next year – \$0.89
Profit margin
\$ \$5.80 \$4.91
% 32.46% 27.48%
Breakeven analysis
Year one breakeven
1,455,000/\$5.80 = 250,862 units
Year two breakeven
1,355,000/\$4.91 = 275,967 units
Average profit
\$5.80 + \$4.91 = \$10.71/2 = \$5.36
\$2,810,000/\$5.36 = 524,253 units
Combined year one and two breakeven
250,862+275,967 = 526,829 units