Sheridan Company wants to produce and sell a new flavored water. In order to penetrate the market, the product will have to sell at $2 per 12 oz. bottle. The following data has been collected:Annual sales50000 bottlesProjected selling and administrative costs$8500Desired profit$62000The target cost per bottle is$0.59.$0.24.$0.17.$0.76.

Target cost per bottle = Sales - Desired profit / Sales units

Answered: Sheridan Company wants to produce and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Sheridan Company wants to produce and sell a new flavored water. In order to penetrate the market, the product will have to sell at $2 per 12 oz. bottle. The following data has been collected:

Annual sales	50000 bottles
Projected selling and administrative costs	$8500
Desired profit	$62000

The target cost per bottle is

$0.59.

$0.24.

$0.17.

$0.76.

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