Pharoah Designs makes various accessories for pets. Their trademark product, PetBed, is perceived to be high quality but not extravagant, and is sold in a variety of pet stores. Donna Clark, marketing manager, has convinced her boss that they are missing an important segment of the market. We can increase the quality of the material and design and market PetBed to a higher-end clientele, Donna claims. We wont compete with our existing product. Its win-win! PetBeds sell for $150 each. Donna estimates the gross margin at $50. After working with production engineers and the marketing research team, Donna has designed a bed that she believes the new market segment will purchase $360 for. The production engineers and accountants believe it will cost about $150 to make.

(a)

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If Pharoah Designs uses cost-plus pricing and prices most products like the original PetBed, what should be the price of the high-end PetBed? (Round answer to 0 decimal places, e.g. 25,000.)

Price of the high-end PetBed

$enter price of the high-end PetBed per bed in dollars per bed

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(b)

If Pharoah Designs wants to preserve the existing gross margin percentage, what is the target cost at a market price of $177? (Round answer to 0 decimal places, e.g. 25,000.)

Target cost

$enter target cost per bed amount in dollars per bed