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 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
We will first calculate the average cost
|Cost per unit||$0.55||0.60||0.70|
|Projected sales units||12,000||15,000||9,000...|
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fromChapter 14 / Lesson 4
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.