littlebirdd86 littlebirdd86

17-02-2020
Business

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Domingo Corporation makes a variety of headphones with logos. The company has discovered a new market for wireless headphones with logos. Market research indicates that these headphones would sell well in the market priced at $34.80 each. Domingo desires an operating profit of 20 percent of costs.
Required:

What is the highest acceptable manufacturing cost for which Domingo would be willing to produce the headphones?

Respuesta :

facundobuzzetti facundobuzzetti

18-02-2020

Answer:

Manufacturing cost= $29 per unit

Explanation:

Giving the following information:

Market research indicates that these headphones would sell well in the market priced at $34.80 each. Domingo desires an operating profit of 20 percent of costs.

To calculate the cost we need to use the following formula:

manufacturing cost= selling price/ (1 + mark up) = 34.8/1.20= $29

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