Answered: What is the Allgood selling price?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Transcribed Image Text:You have just been promoted to product manager for the Allgood (AG) brand multi-symptom 12 - hour analgesic product. The AG product is currently selling at a retail price of $8.99. Retail margins on the product are 33 %, while wholesalers take a 12% margin. Allgood and its direct competitors sell a total of 200 million units annually; Allgood has 25% of this market. Variable manufacturing costs for Allgood are $2.92 per unit. Fixed manufacturing costs are $950,000. The advertising budget for Allgood is $5,500,000. The Allgood product manager's salary and expenses total $70,000. Salespeople are paid entirely by a 12% commission. Shipping costs, breakage, insurance, and so forth are $0.15 per unit. What is the Allgood selling price?

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