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Liung Yi, a close friend and classmate of DaShawn, has discussed an alternative to the...

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Accounting

Liung Yi, a close friend and classmate of DaShawn, has discussed an alternative to the idea of selling direct to consumers. Liung argues that the novelty will need upfront advertising and promotion in order to stimulate awareness of the novelty and that DaShawn will miss out on that promotion if he sells direct to consumers. Liung thinks DaShawn should sell the novelty through a specialty chain like Party City, which has 850 stores in the US. Liung found that Party City would buy DaShawns product and sell it through all 850 stores at a retail price of $1.99/unit. Party City would want a margin of 50% and a cooperative advertising allowance of an additional $.20/unit. Party City estimates that, under these terms, the retailer would sell 2 units of DaShawns novelty per week per store. Under this distribution what would DaShawns annual contribution total?

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