The following is Cullumber Company’s income statement for the past year. Sales revenue $336,000 Cost of goods sold 134,400 Gross margin 201,600 Operating expenses 145,600 Operating income $56,000 If the company wants to sell a new product that costs $49 wholesale while keeping the same markup structure, what will be the price of the new product? (Use the gross margin percentage and round final answer to 2 decimal places, e.g. 25,124.25.) Price of the new product $enter the price of the new product in dollars rounded to 2 decimal places
The following is Cullumber Company’s income statement for the past year. Sales revenue $336,000 Cost of goods sold 134,400 Gross margin 201,600 Operating expenses 145,600 Operating income $56,000 If the company wants to sell a new product that costs $49 wholesale while keeping the same markup structure, what will be the price of the new product? (Use the gross margin percentage and round final answer to 2 decimal places, e.g. 25,124.25.) Price of the new product $enter the price of the new product in dollars rounded to 2 decimal places
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The following is Cullumber Company’s income statement for the past year.
| Sales revenue | $336,000 | |
| Cost of goods sold | 134,400 | |
| Gross margin | 201,600 | |
| Operating expenses | 145,600 | |
| Operating income | $56,000 |
If the company wants to sell a new product that costs $49 wholesale while keeping the same markup structure, what will be the price of the new product? (Use the gross margin percentage and round final answer to 2 decimal places, e.g. 25,124.25.)
| Price of the new product |
$enter the price of the new product in dollars rounded to 2 decimal places
|
Transcribed Image Text:The following is Cullumber Company's income statement for the past year.
Sales revenue
$336,000
Cost of goods sold
134,400
Gross margin
201,600
Operating expenses
145,600
Operating income
$56,000
Transcribed Image Text:If the company wants to sell a new product that costs $49 wholesale while keeping the same markup structure, what will be the
price of the new product? (Use the gross margin percentage and round final answer to 2 decimal places, e.g. 25,124.25.)
Price of the new product
%24
Expert Solution
Working:
Gross margin % = (Gross margin / Sales) x 100
= (201,600/336,000)*100
= 60%
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