Confectioners, a chain of candy stores, purchases its candy in bulk from its suppliers.For a recent shipment, the company paid $3,000 and received 8,500 pieces of candy that are allocated among three groups.Group 1 consists of 2,500 pieces that are expected to sell for $0.25 each.Group 2 consists of 5,500 pieces that are expected to sell for 0.60 each.Group 3 consists of 500 pieces that are expected to sell for $1.20 each.Using the relative sales value method, what is the cost per item in group 3?

Question

Quizplus · Accepted Answer

The relative sales value method allocates costs based on the proportion of total sales value. Calculate the total sales value for each group, find the proportion for group 3, and apply it to the total cost to find the cost per item.

Confectioners, a Chain of Candy Stores, Purchases Its Candy in Bulk