What should we price Fragrance
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What should we price Fragrance at if we want to have a 45.6% margin. Account for unit cost, period expenses and overhead. The production cost is in the report. Ignore inventory carrying costs and assume period expenses and overhead is 50% of production cost. What should the price point be?
Info given for Fragrance:
Category
Sales $28,413
Variable Costs
Direct Material $11,755
Direct Labor $7,763
Inventory Carry $76
Total Variable Costs (Labor, Material, Carry) $19,594
Category
Contribution Margin $8,819
Period Costs
$1,193
SG&A $0
R&D $970
Promotions $1,245
Sales $1,795
Administration $225
Total Period Costs $5,428
Net Margin $3,391
Current Price $38
Current Contribution Margin 31%
Total units produced this year 748
Material cost per unit: $16.12
Labor cost per unit: 10.38
PRICING OPTIONS:
26.50
46.38
72.80
39.75
52.21
Please include all calculations
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