The Chronicle contained one half advertising and one half news stories. Current industry research indicates a newspaper must have three times as much advertising as news stories to make money. In addition, the advertising must be divided in the following ratio: 5 to 3 to 1, retail advertising to national advertising to classified advertising. The Chronicle is typically 48 pages in length.
a. How many pages should be advertising and how many should be news stories?
b. Based on the industry ratios, how should the pages be divided among the three types of advertising
c. After you made the changes in the advertising distributions ratios, your newspaper began making a profit---for the first time in years. If last year’s total advertising revenue was $810,000.00, how much was earned by each type of advertising?
d. When you accepted the job of advertising manager, in addition to your salary, you were promised a 1/50 share of each year’s revenue from retail and classified advertising, and 1/75 share for national. How much bonus will you receive for last year’s sales?
a. How many pages should be advertising and how many should be news stories?
b. Based on the industry ratios, how should the pages be divided among the three types of advertising
c. After you made the changes in the advertising distributions ratios, your newspaper began making a profit---for the first time in years. If last year’s total advertising revenue was $810,000.00, how much was earned by each type of advertising?
d. When you accepted the job of advertising manager, in addition to your salary, you were promised a 1/50 share of each year’s revenue from retail and classified advertising, and 1/75 share for national. How much bonus will you receive for last year’s sales?
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a. The ad to news ratio is 3:1, a total of 3+1=4 "ratio units". Thus, each ratio unit represents 48/4 = 12 pages of the paper. There should be 3*12=36 pages of ads and 1*12=12 pages of news.
b. There are 5+3+1=9 ratio units of advertising, so each of unit represents 36/9 = 4 pages. There should be 5*4=20 pages of retail ads, 3*4=12 pages of national ads, and 1*4=4 pages of classified ads.
c. If earnings per page were constant, the 9 ratio units each represent $810,000/9 = $90,000 in revenue. Retail: 5 units, $450,000; National: 3 units, $270,000; Classified 1 unit, $90,000. (You could also figure this on a dollars per page basis, using $810,000/36 = $22,500 per page.)
d. ($450,000 + $90,000)/50 + $270,000/75 = $10,800 + $3,600 = $14,400
b. There are 5+3+1=9 ratio units of advertising, so each of unit represents 36/9 = 4 pages. There should be 5*4=20 pages of retail ads, 3*4=12 pages of national ads, and 1*4=4 pages of classified ads.
c. If earnings per page were constant, the 9 ratio units each represent $810,000/9 = $90,000 in revenue. Retail: 5 units, $450,000; National: 3 units, $270,000; Classified 1 unit, $90,000. (You could also figure this on a dollars per page basis, using $810,000/36 = $22,500 per page.)
d. ($450,000 + $90,000)/50 + $270,000/75 = $10,800 + $3,600 = $14,400