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YoyurtONE has new line of Greek yogurt in a 8 oz size. The Marketing Managers plan to test market...

Question:

YoyurtONE has new line of Greek yogurt in a 8 oz size. The Marketing Managers plan to test market the product in one small market for three weeks. They have calculated the cost and projected sales for each of the different flavors: Plain cost is .55 each with a projected sales of 12,000 units, Strawberry cost per unit is .60 with a projected sales of 15,000 units, Blueberry cost are .70 per unit with a projected sales of 9,000 units. Each yogurt product will retail at the same price. Using the average cost pricing and a 35% markup what will YoyurtOne price these product at the retail level?

Cost-plus Pricing:

Cost-plus pricing is a method to calculate the selling price of a product by adding a desired markup to the total unit cost. This price should obviously then be tested in the market.

Answer and Explanation: 1

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We will first calculate the average cost

Plain Strawberry Blueberry Total
Cost per unit $0.55 0.60 0.70
Projected sales units 12,000 15,000 9,000...

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Cost Accounting Practices for Pricing Decisions

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Chapter 14 / Lesson 4
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Cost accounting directly influences pricing decisions by including various types of costs. See how inventory, fixed, and variable costs are considered when implementing a pricing strategy and adjusting to changes in sales volume.


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