Please provide correct answer general Accounting Tom Gilgen is considering the production of a new line of jeans.Based on preliminary market research, management thedecided that each pair of jeans should be priced at $170.Furthermore, management believes that the profit marginshould be 25 percent of sales revenue.What is target cost?A) $127.50B) $62.00C) $112.00D) $95.75

Step 1: Define Profit MarginProfit Margin is the percentage of profit over the net sales. These is…

Answered: Tom Gilgen is considering the…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 10EB: Keleher Industries manufactures pet doors and sells them directly to the consumer via their web...

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A clothing company has determined that if the price of a T-shirt is K40, then 150 will be demanded by T-shirt wearers. When the price is K45, then 100 T-shirts are demanded by T- shirts wearers.(a) Find the price-demand equation, assuming that it is linear.(b) Find the revenue function.(c) Find the number of items sold that will give the maximum revenue. What is the maximum revenue?(d) What is the price of each item when maximum revenue is achieved?
Friedman Co. is considering adding a new product. Based on preliminary market research, the company has decided that the price of the product should be $47. If the company's profit margin is 22 percent of revenues, what should the target cost be? $
The Caplow Company, a chair manufacturing shop decides to use target profit pricing toestablish a price for a chair. The variable cost for each chair is $25. Fixed costs for the company is $50,000. What price should the company set, if they target a 20% return on sales for 10,000 units?
Marigold Corp.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 Projected selling and administrative costs Desired profit The target cost per bottle is O $0.16. O $0.20. $0.80. O $0.64. 55000 bottles $8900 $66000
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A jeans maker is designing a new line of jeans called Slims. The jeans will sell for $205 per pair and cost $164 per pair in variable costs to make. 1. Compute the contribution margin per pair. 2. Compute the contribution margin ratio. 3. Describe what the contribution margin ratio reveals about this new jeans line.
A jeans maker is designing a new line of jeans. These jeans will sell for $410 per unit and cost $328 per unit in variable costs to make. Fixed costs total $120,000. If 5,000 units are produced and sold, what does the income equal?
Keleher Industries manufactures pet doors and sells them directly to the consumer via their web site. The marketing manager believes that if the company invests in new software, they will increase their sales by 10%. The new software will increase fixed costs by $400 per month. Prepare a forecasted contribution margin income statement for Keleher Industries reflecting the new software cost and associated increase in sales. The previous annual statement is as follows:
A shoemaker desires to achieve a profit of P50,000 by selling 500 pairs of shoes. The fixed cost in producing the product is P70,000 while the variable cost per pair of shoes is P300. Determine the appropriate price per pair which will achieve the desired profit of the shoemaker.
Warner clothing is considering the introudciton fo a new baseball cap for sales by local vendors. The comapny has collected the following price and cost characteristics. A. What number must Warner sell per month to break even? B. What number must Warner sell per month to make an operating profit of $30,000?
a retailer wants to add a line of bike carriers to his sports department and plans to sell one model at $39.99. If he can buy a good product for $32.50 less 20%, will he be able to get his usual markup of 42% on the selling price and sell the carrier at the price he set?
Dirac Manufacturers Co. plans to introduce a new type of shirt based on the following information: the selling price is $57.00, the variable cost per unit is $18.00, the fixed costs are $7800.00 and capacity per period is 500 units. a)Calculate the break-even point in units. b)Calculate the break-even point to nearest dollar. c)Calculate the break-even point as a percentage of capacity.

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