Vaughn Manufacturing 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 sales50000 bottlesProjected selling and administrative costs$7600Desired profit$80000The target cost per bottle is$0.60.$0.15.$0.25.$0.40.

Total cost per unit = ( Sales - Desired profit ) / Units of sales

Answered: Vaughn Manufacturing wants to produce…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Vaughn Manufacturing 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	50000 bottles
Projected selling and administrative costs	$7600
Desired profit	$80000

The target cost per bottle is

$0.60.

$0.15.

$0.25.

$0.40.

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