Mark up - Profit Margin %

User Generated

Fnenufzvyr123

Economics

Description

A company manufacturing toys has a fixed cost of $100,000. Variable cost is 6 per toy. Selling price is $10 per toy. Company target profit is $120,000.

b.The company found that its variable cost is going to increase by $2 and plans to raise its selling price by $3 and reduced the fixed costs by $20,000. How many more (less) toys have to be sold at the new price to reach the target profit of $120,000?

c.What is the markup (profit margin %) on sales price at this new sales volume? What is the markup (profit margin %) on total cost?

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Explanation & Answer

Here you go. I cannot see the (a) requirement in your question. Attached is the answer for B and C.Please let me know if you have any question.Thanks

A company manufacturing toys has a fixed cost of $100,0...


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