Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. product pricing: two products assume verbatim, a s

Product Pricing: Two Products Assume Verbatim, a subsidiary of CMC Magnetics, manufactures two products, CDs...

50.1K

Verified Solution

Question

Accounting

image

Product Pricing: Two Products Assume Verbatim, a subsidiary of CMC Magnetics, manufactures two products, CDs and DVDs, both on the same assembly lines and packaged 30 disks per pack. The predicted sales are 150,000 packs of CDs and 500,000 packs of DVDs. The predicted costs for the year are as follows: Variable Costs Fixed Costs Materials $4,000,000 $1,560,000 Other 2,000,000 2,052,000 CDs use 25% of the materials costs and 10% of the other costs. DVDs use 75% of the materials costs and 90% of the other costs. The management of Verbatim desires an annual profit of $450,000. (a) What price should Verbatim charge for each disk pack if management believes the DVDs sell for twice the price of the CDs? Round answers to the nearest cent. CDs $ DVDs $ (b) What is the total profit per product using the selling prices determined in part (a)? Use negative signs with answers, if appropriate. CDs $ DVDs $

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students