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Please help with requirement 4 Colton Paints makes and sells paint to home improvement stores. Colton's only plant can produce up to 14 million cans
Please help with requirement 4
Colton Paints makes and sells paint to home improvement stores. Colton's only plant can produce up to 14 million cans of paint per year. Current annual production is 12 million cans. Fixed manufacturing, selling, and administrative costs total $16.8 million per year. The variable cost of making and selling each can of paint is $6.40. Stockholders expect a 20% annual return on the company's $36 million of assets. Read the requirements. Less: Fixed costs 16,550,000 | Target total variable costs A 59,050,000 12,000,000 Divided by: Number of units | Target variable cost per unit 4.92 Requirement 4. Suppose Colton plans to spend an additional $1.8 million on advertising to differentiate its product in order to increase sales volume to 13 million cans and become more of a price-setter. Assume that Colton did reduce its total fixed costs by $250,000 as stated in Requirement 3 but could not find ways to save on its variable costs. What is the cost-plus price for a can of paint under these conditions? Select the formula labels and enter the amounts to calculate Colton's cost-plus price for a can of paint under these conditions. (Enter currency amounts in dollars, not in millions. Round cost per unit amounts to the nearest cent, $X.XX.) Total variable costs Total fixed costs Current total costs Plus: Desired profit Target revenue Divided by: Number of units Cost-plus price per unitStep by Step Solution
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