Task Sheet 5

PRODUCTION AND MARKETING DECISIONS

You are now able to make decisions about the production of the new magazine. Click on the yellow cells
and use the drop down menus. Use all the information that you have and think carefully about your
decisions - you will have to justify them later.

Type of magazine 1
Enter 1 for mainly stories ( 20p per copy) or 2 for mainly pictures (40p per copy)
Advertising spend (maximum = £250,000) £100,000
You will explain your advertising decisions in detail later
Free gift with 1st issue? 1=Yes 2=No 2
Costs 25p per copy - You will explain your promotion decisions in detail later
Distribution method 1
1 = mail order (10p per copy sold) or 2 = newsagents (20p per copy sold)
You will explain your distribution decisions in detail elsewhere

Number of copies produced for the first issue: 250,000

I chose this output because: (click in the text box below and give a detailed answer)

My costs of production
Variable Costs
Variable production cost per magazine £0.20
Variable distribution cost per magazine £0.10
Free gift cost per magazine £0.00
Variable production cost x copies produced = £50,000
Distribution cost per magazine x copies produced = #VALUE!
Free gift cost (.25) x copies produced = £0
Total Variable cost #VALUE!
Fixed Costs
Factory Fixed costs £100,000
Advertising Cost £100,000
Total Fixed Costs £200,000

Total cost of production #VALUE!

Average cost per magazine #VALUE!

You will use the average cost per magazine to help you chose your price.
ellow cells
your

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