value: 5.00 points Domingo Corporation makes a variety of headphones with logos.

Question

value: 5.00 points Domingo Corporation makes a variety of headphones with logos. The company has discovered a new market for wireless headphones with logos. Market research indicates that these headphones would sell well in the market priced at $34.80 each. Domingo desires an operating profit of 20 percent of costs. Required: What is the highest acceptable manufacturing cost for which Domingo would be willing to produce the headphones? (Round your answer to 2 decimal places.) costs References eBook& Resources Worksheet Difficulty: 2 Medium Learning Objective: 04-03 Understand several approaches for establishing prices based on costs for long-run pricing decisions Check my work

Explanation / Answer

Highest acceptable manufacturing costs = sellin price/120%

=34.80/120% = $29.00

Explanation

Total manufacturing costs + operating profit on costs = Selling price

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