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Cravings makes candy bars for vending machines and sells them to vendors in cases of 30 bars. Although Cravings makes a variety of candies,
Cravings makes candy bars for vending machines and sells them to vendors in cases of 30 bars. Although Cravings makes a variety of candies, the cost differences are insignificant, and the cases all sell for the same price. Cravings has a total capital investment of $13,000,000. It expects to produce and sell 700,000 cases of candy next year. Cravings requires a 12% target return on investment. Expected costs for next year are: (Click the icon to view the costs.) Cravings prices the cases of candy at full cost plus markup to generate profits equal to the target return on capital. Read the requirements.
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