Product Pricing: Single Product (LO2) Sue Bee Honey is one of the largest processors of its product
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Product Pricing: Single Product (LO2)
Sue Bee Honey is one of the largest processors of its product for the retail market. Assume that one of its plants has annual fixed costs total $8,000,000, of which $3,000,000 is for administrative and selling efforts. Sales are anticipated to be 800,000 cases a year. Variable costs for processing are $40 per case, and variable selling expenses are 25 percent of selling price. There are no variable administrative expenses.
Required If the company desires a profit of $5,000,000, what is the selling price per case? LO.1
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