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
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter5: The Income Statement And The Statement Of Cash Flows
Section: Chapter Questions
Problem 2MC: The following information is available for Cooke Company for the current year: The gross margin is...
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