Question
Net sales for the year were $500,000 and cost of goods sold was $295,000 for the companys existing products. A new product is presently under
| Net sales for the year were $500,000 and cost of goods sold was $295,000 for the companys existing products. A new product is presently under development and will have an expected selling price of not more than $57 per unit in order to remain competitive with similar products in the marketplace. |
| Required: |
| a. | Calculate gross profit and the gross profit ratio for the year. |
| __________________________ ________________________ ______________________% __________________________ ________________________ ______________________% __________________________ ________________________ ______________________% |
| b. | What is the maximum cost per unit that can be incurred to manufacture the new product so that the product can be priced competitively and will not result in a reduction to the companys gross profit ratio?(Do not round intermediate calculations and round your final answer to 2 decimal places.) |
Maximum manufacturing cost __________ per unit. |
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Fundamental Accounting Principles
Authors: Larson Kermit, Tilly Jensen
Volume I, 14th Canadian Edition
71051503, 978-1259066511, 1259066517, 978-0071051507
