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utensil. The firm has conducted significant market research and estimated the following pattern for sales of the new product: Year Expected     Volume       Expected Price per Unit 1                      48,000 units                  $19 2                      48,000 units                  $20 3                      90,000 units                  $16 4                      40,000 units                  $12 If the firm desires to net $3.50 per unit in profit over the life of the product, and selling and administrative expenses are expected to average $50,000 per year, what is the target cost to produce the new utensil?

utensil. The firm has conducted significant market research and estimated the following pattern for sales of the new product: Year Expected     Volume       Expected Price per Unit 1                      48,000 units                  $19 2                      48,000 units                  $20 3                      90,000 units                  $16 4                      40,000 units                  $12 If the firm desires to net $3.50 per unit in profit over the life of the product, and selling and administrative expenses are expected to average $50,000 per year, what is the target cost to produce the new utensil?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Utah Utensil has developed a new kitchen

utensil. The firm has conducted significant market research and estimated the following pattern for sales of the new product:

Year Expected     Volume       Expected Price per Unit

1                      48,000 units                  $19

2                      48,000 units                  $20

3                      90,000 units                  $16

4                      40,000 units                  $12

If the firm desires to net $3.50 per unit in profit over the life of the product, and selling and administrative expenses are expected to average $50,000 per year, what is the target cost to produce the new utensil?

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