In order to sell a product at a profit, the product must be priced higher...
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Accounting
In order to sell a product at a profit, the product must be priced higher than the total cost to build the unit, plus period expenses and overhead.
At the end of last year, Digby had their product Daze aimed at the Americas Budget segment. Use the Globe's Product Analysis to find Daze's production cost (labor + materials) in the Americas region. Exclude possible inventory carrying costs. Assume period expenses and overhead total 50% of their production cost.
What is the minimum price the product could have been sold for in the American region to cover the unit cost, period expenses, and overhead?
$11.36 $5.68 $23.00 $17.03
Region
Name
Units Sold
Price
Customer Satisfaction
Accy
Speed
Service Life
Age
Region Kit
Material Costs
Labor Costs
Contrib. Margin
Americas
Daze
923
$23.00
21
7.2
7.2
14,000
3.3
Yes
$6.79
$4.57
49.38%
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