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Sergio039 [100]
3 years ago
13

Summit Products, Inc. is interested in producing and selling an improved widget. Market research indicates that customers would

be willing to pay $98 for such a widget and that 58,000 units could be sold each year at this price. The current cost to produce the widget is estimated to be $58.
Summit has learned that a competitor plans to introduce a similar widget at a price of $88. In response, Summit may reduce its selling price to $88. If Summit requires a 25% return on sales, what is the target cost for the new widget?

a. $88.00
b. $66.00
c. $22.00
d. $24.50
Business
1 answer:
ladessa [460]3 years ago
7 0

Answer:

b.$ 66

Explanation:

The question requires that Summit requires a return on sales of 25 %. To achieve that the cost of goods sold should be 75 %.

if the revised selling price is                                         $ 88

the target cost price would be ( $ 88 * 75 %)              % 66                

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Zanzabum

Answer:

c. $2,580

Explanation:

Calculation for What was its net operating working capital that was financed by investors

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Less Accounts payable ($575)

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3 years ago
A company has the following account balances: Sales revenue $2,000,000: Sales Returns and Allowances $250,000: Sales Discounts $
Naily [24]

Answer:

0.25 or 25%

Explanation:

The computation of the gross profit rate is shown below:

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And, the Cost of goods sold is $1,275,000

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So, the gross profit rate is

= $425,000 ÷ $1,700,000

= 0.25 or 25%

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3 years ago
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chubhunter [2.5K]

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<u></u>

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B is the answer

Explaination step by step:

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