Net sales for the year were $450,000 and cost of goods sold was $297,000 for the company's existing products. A new product is presently under development and has an expected selling price of not more than $75 per unit in order to remain competitive with similar products in the marketplace. Required: a. Calculate gross profit and the gross profit ratio for the year. Net sales Cost of goods sold Gross profit $ 450,000 $ 153,000 b. What is the maximum cost per unit that can be incurred to manufacture the new product so that the product can be priced competitively and will not result in a reduction to the company's gross profit ratio? (Round your final answer to 2 decimal places.) Maximum manufacturing cost per unit

Net sales for the year were $450,000 and cost of goods sold was $297,000 for the company's existing products. A new product is presently under development and has an expected selling price of not more than $75 per unit in order to remain competitive with similar products in the marketplace. Required: a. Calculate gross profit and the gross profit ratio for the year. Net sales Cost of goods sold Gross profit $ 450,000 $ 153,000 b. What is the maximum cost per unit that can be incurred to manufacture the new product so that the product can be priced competitively and will not result in a reduction to the company's gross profit ratio? (Round your final answer to 2 decimal places.) Maximum manufacturing cost per unit

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 3CE: Pietro expects to produce 50,000 units and sell 49,300 units. Beginning inventory of finished goods...

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