Nikki designed a line of environmentally friendly handbags under the brand Nik & Mik. You are the marketing manager. Round all numbers to two decimal places.
a. After assessing the competitors, Nikki needs to price her products with a markup percentage of 40%. The cost is $50 for the small handbags and $60 for the medium handbags. Determine the selling price for each type of handbag.
b. Nik & Mik is ready to launch their large handbags. You determine that Nikki should set her price 25% below her competitor’s price of $160. Nikki’s cost to produce the large handbags is $70 per unit. Determine the markup percentage.
c. Calculate the gross profit margin for small, medium, and large handbags.
d. After a year of operations, you determine that Nikki should set a standard target gross margin percentage of 40% on all of Nikki’s products. Determine the new prices for the small, medium, and large handbags.