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5. Riley's Canine Accessories (RCA) produces a multi-color leash/collar combination under is Top Dog brand that it currently sells for $14.99 plus sales tax of
5. Riley's Canine Accessories (RCA) produces a multi-color leash/collar combination under is Top Dog brand that it currently sells for $14.99 plus sales tax of 7.75%. Fixed expenses are $137,250 for the year and variable expenses are $7.75 per leash. In addition, the RCA salespeople are paid a commission of 10% of their sales. a. An outside firm has just approached RSA to make a special, one-time purchase of 11,000 leashes. These leashes would not be sold by the salespeople, and therefore no commission would have to be paid. The unit price RCA would have to charge on this special order to earn a profit of $25,000 is: b. Did you include sales tax in your analysis in (a). Why or why not? c. Notwithstanding RCA's decision on the above special order, if RCA spends an additional $20,250 on advertising, decreases its selling price to $11.75 per leash, and sells 57,500 leashes, its net operating income would be
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