A retailer can purchase a private-label bread for 59ȼ a loaf.The bread sells for 89ȼ.Total direct retailing costs for the bread (warehouse costs,direct labor,and spoilage)equal 10ȼ per loaf.In addition,5ȼ per loaf is charged for administrative overhead.What is the direct product profitability per loaf?

Question

Quizplus · Accepted Answer

The direct product profitability per loaf is calculated as the selling price minus the cost price and all associated costs. So, 89ȼ (selling price) - 59ȼ (purchase cost) - 10ȼ (retailing costs) - 5ȼ (administrative overhead) = 15ȼ.

A Retailer Can Purchase a Private-Label Bread for 59ȼ a Loaf.The