Question
Super sells its Body Powder line to wholesalers for $6.95 per eight (8) ounce container. Promoted as a super soft body powder, Super's manufacturer suggested
Super sells its Body Powder line to wholesalers for $6.95 per eight (8) ounce container. Promoted as a super soft body powder, Super's manufacturer suggested retail selling price (MSRP) is $20.95 per eight (8) ounce container and retailers follow this pricing. Super uses an 70% cost basis markup while retailers in this channel use a 60% selling price basis markup.
If the wholesaler has fixed costs of $10,000 associated with the Body Powder line and has a profit objective of $20,000 for the product line, what is the wholesalers BEP$ (breakeven point in sales $) to cover fixed costs and profit objective?
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