Answered

Discover the answers you need at Westonci.ca, a dynamic Q&A platform where knowledge is shared freely by a community of experts. Get immediate and reliable answers to your questions from a community of experienced experts on our platform. Experience the ease of finding precise answers to your questions from a knowledgeable community of experts.

Product Pricing: Single Product
Sue Bee Honey is one of the largest processors of its product for the retail market. Assume that one of its plants has annual fixed costs totaling $12,000,000, of which $4,500,000 is for administrative and selling efforts. Sales are anticipated to be 800,000 cases a year. Variable costs for processing are $30 per case, and variable selling expenses are 25 percent of selling price. There are no variable administrative expenses. If the company desires a profit of $7,500,000, what is the selling price per case? Round answer to two decimal places.
$ 0 price per case

Sagot :

Answer: $72.50

Explanation:

Let the selling price per case be represented by x.

Based on the information you can in the question, we will have an equation as:

(80000 × x) = 12,000,000 + 7,500,000 + (800,000 × 30) + (0.25 × 800000x

800000x = 12,000,000 + 7,500,000

+ (800,000 × 30) + (0.25 × 800000x)

800000x = 43500000 + 200000x

Collect like terms

800000x - 200000x = 43,500,000

600,000x = 43500000

x = 43,500,000 / 600,000

x = 72.50

Selling price per case is $72.50

Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. We appreciate your visit. Our platform is always here to offer accurate and reliable answers. Return anytime. Westonci.ca is committed to providing accurate answers. Come back soon for more trustworthy information.