Question
The sales manager of Trishas Global Marketing (TGM) is considering expanding sales by taking their Original Widget and modifying it for export into the European
The sales manager of Trishas Global Marketing (TGM) is considering expanding sales by taking their Original Widget and modifying it for export into the European and Asian markets. Relatively minor cosmetic changes will be made to enhance appeal to local tastes. After reviewing the sales forecasts, the sales department feels that 50% of units sold will be the Original product, 30% will be new Euro and the remainder will be the new Pacific. The following information has been assembled by the sales and production departments. Original: Sales Price (per unit)... $65.00; Material cost (per unit)... $26.00; Direct labor (per unit)... $13.00; Variable OH (per unit)... $17.00. Euro: Sales Price (per unit)... $75.00; Material cost (per unit)... $28.00; Direct labor (per unit)... $14.00; Variable OH (per unit)... $16.00. Pacific: Sales Price (per unit)... $70.00; Material cost (per unit)... $23.00; Direct labor (per unit)... $15.00; Variable OH (per unit)... $16.00. The common fixed costs associated with the manufacture of these three products are $1,920,000 per year and TGM has a marginal tax rate of 25%. Determine the Weighted Average CM of TGM for these products. Round to $0.01.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started