Cross Athletic Gear (CAG) is in the process of negotiating contracts with local universities to...
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Accounting
Cross Athletic Gear (CAG) is in the process of negotiating contracts with local universities to be the sole providers for all their athletic uniforms. You are in the process of determining an acceptable sales price for the contract. CAG has just established a yearly operating income goal of $800,000 for the year, and as the manager, you will receive a significant bonus if you achieve this goal. The contract would be for 175,000 uniforms, which is the full operating capacity of CAG. Your managerial accountant provided the following estimated costs:
Cost of Goods sold
$628,000
Selling, General, and Administrative Expenses
$797,000
The contract bids are incredibly competitive, so the CFO wants CAG to offer their absolute lowest possible sales price. What is your recommended sales price that still achieves the operating income goal? Provide your answer to two decimal places, following standard rounding conventions. Do not include the "$" sign.
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