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Sue Bee Honey is one of the largest processors of its product for the retail market. Assume that one of its plants has annual fixed costs totaling $16,317,500, of which $5,250,500 is for administrative and selling efforts. Sales are anticipated to be 950,000 cases a year. Variable costs for processing are $35 per case, and variable selling expenses are 10% of selling price. There are no variable administrative expenses If the company desires a pretax profit of $9,000,000, what is the selling price per case?

Sue Bee Honey is one of the largest processors of its product for the retail market. Assume that one of its plants has annual fixed costs totaling $16,317,500, of which $5,250,500 is for administrative and selling efforts. Sales are anticipated to be 950,000 cases a year. Variable costs for processing are $35 per case, and variable selling expenses are 10% of selling price. There are no variable administrative expenses If the company desires a pretax profit of $9,000,000, what is the selling price per case?

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter10: Cost Analysis For Management Decision Making
Section: Chapter Questions
Problem 16E
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Sue Bee Honey is one of the largest processors of its product for the retail market. Assume that one of its plants has annual fixed costs totaling $16,317,500, of which $5,250,500 is for administrative and selling efforts. Sales are anticipated to be 950,000 cases a year. Variable costs for processing are $35 per case, and variable selling expenses are 10% of selling price. There are no variable administrative expenses If the company desires a pretax profit of $9,000,000, what is the selling price per case?

 

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