Business/Business I – Exam #3/Spring 2020 I. Answer the following question based on the following information (a month has 4 weeks). Jerome’s income and expenses are the following: – Rent: $2500/mo. Weekly wages : full-time @$40/hrs.; part-time @30hrs@$25/hr.Business property income: $1750/mo.Social Security Taxes: $400/mo.Food: $3600/yr.Clothing: $150/wkIncome taxes: 15% of monthly wagesProperty taxes: 10% of annual rental revenueUtilities: $99/mo. [A] What is Jerome’s discretionary income? [B] Jerome wants to place new furniture in his business property. He believes that he can purchase the furniture at the end of this year because: Since January of this year Jerome has been saving approximately ¼ (round to nearest dollar) of his discretionary income each month Beginning June 1, 2020 Jerome’s friend, Marvin, will begin living with Jerome. He will pay Jerome exactly 1/5 of his present rental cost each month. Jerome will add this amount to the discretionary income he has been saving monthly. By the end of the year will Jerome be able to purchase the new furniture if the furniture will cost $4000-$5000? (Show your calculations) II. Determine if the following statements are True (T) or False (F). Place a “T” or an “F” on the blank line next to the statement. If the statement is False provide a correct statement: 1) More than likely one uses disposable income to purchase a luxury item_______ 2) An aesthetic modification appeals to one of our senses________ 3) A patent protects original writings______ 4) A “fad” product only goes through 2 cycles________ 5) An example of direct selling is Avon cosmetics_____ 6) There is no profit until after you break even_________ 7) A business plan is a component of its marketing plan_____ 8) Process material is a business product classification______ 9) Deletion of a product depends on whether there is another to take its place_____ 10) Pricing goods is within a warehouse function_______ III. In this current year Company has produced 300 widgets. Over the next 2 years production will increase by 25% more of the previous year. With each increase in production cost/unit will decrease 10% less of the previous year. Company’s present profit margin is 30%. Present cost/unit is $24. If price remains constant how many units will have to be sold in Year 3 of production to breakeven? IV. Match the following words or phrases with its appropriate desсrіption below. Place the letter on the blank line next to the correct numbered match: A) market segmentation N) item of convenience shopping B) cost O) consumer buying behavior C) preliminary investigation P) maturation D) ergonomic Q) behavioristic E) law of the marketplace(?) R) pricing strategy F) modification S) develop media plan G) SWOT analysis T) Utility H) risky(?) U) prospecting ` I) promotion mix V) COVID19 ` J) transfer ownership W) religion K) with an eye on competitor X) declining in sales L) mass media Y) profit M) raw material Z) B2B/B2C 1) classification of distribution____ 14) Price – Profit ＝ _____ 2) body “fit” design______ 15) mark-up_____ 3) internet appeal_______ 16) market analysis component___ 4) product component_____ 17) ergonomic fit_____ 5) utility_______ 18) part of advertising 6) research____ 19) demand pricing_____ 7) modifiable? _____ 20) demographic_____ 8) target market____ 21) market segmentation___ 9) personal selling (?)______ 22) facilitating function_____ 10) socks______ 23) form______ 11) marketing-communication mix_____ 24) personal income____ 12) flattened sales______ 25) product_______ 13) competition pricing_______ 26) market threat_______ V. Your research has shown that your product will appeal most favorably to “Bokos”. This group is very small and extremely picky as to what they purchase. Yet they are very willing to spend “on what they want”. You have only a little capital left for advertising. What media class might you choose? Explain why as to advantages and disadvantages of your choice.