Sunshine Travel is designing a travel mug and has determined that a price of $8 will be attractive in the marketplace.The company seeks to earn a profit of 30% percent of selling price, and estimates it can sell 21,000 mugs.Total fixed costs are expected to be $23,100.By how much will the target cost change per mug if the profit is raised to 40% instead of 30%?

Question

Quizplus · Accepted Answer

The target cost per mug is $5.60. If the profit is raised to 40%, the target cost per mug will increase to $6.40. The difference is $0.80.

Sunshine Travel Is Designing a Travel Mug and Has Determined