The standard price for one dozen pierogis has been $5.99 per dozen. Depending upon the ingredients, the competitors’ prices range from $2.79 to $5.39 per dozen in most grocery stores. A breakdown of the cost structure revealed total variable costs of $1.87/dozen and total fixed costs of $0.20/dozen. Using the target price of $5.99, determine the price point the company should use for the wholesaler. Does this price point allow the company to maintain its desired 45 percent mark-up?
The standard price for one dozen pierogis has been $5.99 per dozen. Depending upon the ingredients, the competitors’ prices range from $2.79 to $5.39 per dozen in most grocery stores. A breakdown of the cost structure revealed total variable costs of $1.87/dozen and total fixed costs of $0.20/dozen. Using the target price of $5.99, determine the price point the company should use for the wholesaler. Does this price point allow the company to maintain its desired 45 percent mark-up?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The standard price for one dozen pierogis has been $5.99 per dozen. Depending upon the ingredients, the competitors’ prices range from $2.79 to $5.39 per dozen in most grocery stores.
A breakdown of the cost structure revealed total variable costs of $1.87/dozen and total fixed costs of $0.20/dozen.
Using the target price of $5.99, determine the price point the company should use for the wholesaler. Does this price point allow the company to maintain its desired 45 percent mark-up?
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