Kate & Hark's, a custom kitchen cabinet store, has received a bulk order for the supply of 400 cabinets.The variable cost incurred is $200 per unit and the fixed cost is $44,000. If a target profit of 20 percent of sales is desired, what price should be charged for a typical cabinet section?
A)$372.00
B)$311.00
C)$445.50
D)$387.50

Question

Quizplus · Accepted Answer

Firms such as supermarkets often use target return-on-sales pricing to set prices that will give them a profit that is a specified percentage-say, 1 percent-of the sales volume.Target return on sales = target profit F1F1F1S1F1F1F10 total revenue.

Kate & Hark's, a Custom Kitchen Cabinet Store, Has Received