Product Pricing: Two Products

Quality Data manufactures two products, CDs and DVDs$,$ both on the same assembly lines and packaged $10$ disks per pack. The predicted sales are $400,000$ packs of CDs and $500,000$ packs of DVDs$.$ The predicted costs for the year $2014$ are as follows:

Variable Costs Fixed Costs

Materials $$200,000$ $$500,000$

Other $250,000800,000$

Each product uses $50$ percent of the materials costs. Based on manufacturing time, $40$ percent of the other costs are assigned to the CDs$,$ and $60$ percent of the other costs are assigned to the DVDs$.$ The management of Quality Data desires an annual profit of $$100,000.$

$($a$)$ What price should Quality Data charge for each disk pack if management believes the DVDs sell for $20$ percent more than the CDs$?$ Round answers to the nearest cent.

CDs $Answer $1$

$0$

DVDs $Answer $2$

$0$

$($b$)$ What is the total profit per product using the selling prices determined in part $($a$)?$ Use negative signs with answers, if appropriate.

CDs $Answer $3$

$0$

DVDs $ Answer $4$

$0$