Answered: The variable cost is $ (Round to the…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 4Q: Lizzys is a retail clothing store, specializing in formal wear for weddings. They purchase their...

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Transcribed Image Text:Many luxury sheets cost less than $200 to make but sell for more than $500 in retail stores. Some cost even more consumers pay almost $3,000 for Frett'e "Tangeri Pizzo" king-size luxury linens. The creators of a new brand of luxury linens, called Boll & Branch, have entered this market and are determining the price at which to sell their sheets directly to consumers online. They want to price their sheets lower than most brands but still want to earn an adequate margin on sales. The sheets come in a luxurious box that can be reused to store lingerie, jewelry, or other keepsakes. The Boll & Branch brand touts fair trade practices when sourcing its high-grade long-staple organic cotton from India. Given the cost per king-size sheet set below, and assuming the manufacturer has total fixed costs of $380,000 and estimates first year sales will be 20,000 sets, determine the price to consumers if the company desires a 60 percent margin on sales. Click the icon to view the cost information for a king-size set The variable cost is $ (Round to the nearest dollar.)

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