Question
An athletic mouth guard manufacturer has invested $500,000 in the business and wants to set a price to earn a 30 percent return on investment.
An athletic mouth guard manufacturer has invested $500,000 in the business and wants to set a price to earn a 30 percent return on investment. The company thinks it can capture 1% of the United States' 18 million athletes at a variable unit cost of $2.50 per mouth guard.
What would you price the mouthguard at? Would you go higher or lower than this? WHY?
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Managerial Accounting Tools for Business Decision Making
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
8th edition
978-1-119-3904, 1119392422, 111939242X, 1119390451, 978-1119392422
