Essay: Total Revenue of the Marketing Segment

Sample Essay

The revenue generated from marketing a single ITC as indicated above is an initial $449.95 and $49.95 and the total revenue for a single ITC sold can be calculated as follows.

Total Revenue per ITC = 449.95 + (49.95 X 12)

Total Revenue per ITC = 449.95 + 599.4

Total Revenue per ITC = $1049.35

The total revenue of the marketing segment of the company on 2008 according to the company annual report is $133,635,000 and the net income for the marketing segment in 2008 is $4,436,000 (YTB International, 2008). The total revenue and the revenue per ITC are used to calculate the level of activity in 2008 as follows.

Level of activity = 133,635,000 / 1049.35

Level of activity = 127350 ITC’s

The total costs of the marketing segment cannot be clearly identified through financial statements and estimates are made on the variable cost and fixed cost of the marketing segment using percentage of sales basis. The variable costs for the marketing segment consist of marketing commissions and training programs and marketing materials and the fixed costs include general and administrative expenses. The percentages calculated on the basis of total revenue and total expenses can be implemented on revenue from marketing to arrive at variable and fixed costs of the marketing segment. All values used in the calculation of the following percentages are taken from the annual report of the company (YTB International, 2008).

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