Net sales for the year were $450,000 and cost of goods sold was $297,000 for the companys
Question:
Net sales for the year were $450,000 and cost of goods sold was $297,000 for the company’s existing products. A new product is presently under development and has an expected selling price of not more than $75 per unit in order to remain competitive with similar products in the marketplace.
Required:
a. Calculate gross profit and the gross profit ratio for the year.
b. What is the maximum cost per unit that can be incurred to manufacture the new product so that the product can be priced competitively and will not result in a reduction to the company’s gross profit ratio?
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a Net sales 450000 1000 Cost of goods sold 297000 660 Gross profit 153000 340 Gross profit ratio 153...View the full answer
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Related Book For 
Accounting What the Numbers Mean
ISBN: 978-1260565492
12th edition
Authors: David Marshall, Wayne McManus, Daniel Viele
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