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Q.19-9SE

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Horngren'S Financial And Managerial Accounting
Found in: Page 1066

Short Answer

Refer to Short Exercise S19-8. Spectrum Corp. desires a 25% target gross profit after covering all product costs. Considering the total product costs assigned to the Products C and D in Short Exercise S19-8, what would Spectrum have to charge the customer to achieve that gross profit? Round to two decimal places.

Price for Product C: $400.53

Price for product D: $805.33

See the step by step solution

Step by Step Solution

Price for Product C

Per unit cost for product C = $300.4

As the target gross profit is 25%

So, the present cost should be 75% of the sales price.

Price for Product D

Per unit cost for product D = $604

As the target gross profit is 25%

So, the present cost should be 75% of the sales price.

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