Problem Four 1. Carter Company Carter Company\'s selling price of $595 for its p

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Problem Four

1.         Carter Company

Carter Company's selling price of $595 for its product A is 26% higher than its current cost. What is the product's cost? DHC Company's cost of $642 for its product A is 24% lower than its current selling price. What should be the product's cost if it expects a return of 29% on sales? Saba Printing had average revenue of $147,000 per month. Variable costs are 64% of revenue and fixed costs amount to 48% of variable costs. The company had an investment of $980,000. Company's return on investment amounts to? ABC Company's selling price of $490 for its product A is 22% higher than its current cost. What is the product's cost? ABC Company's cost of $480 for its product A is 20% lower than its current selling price. What should be the product's cost if it expects a return of 32% on sales? NBC Company's current selling price is $270 per unit on sales of 500 units per year. What should be the targeted cost if you expect a return of 15% on an investment of $400,000? Saba Printing had average revenue of $108,000 per month. Variable costs are 62% of revenue and fixed costs amount to 52% of variable costs. The company had an investment of $920,000. Company's return on investment amounts to Saba Company anticipates selling 600 units of the software it has developed that has a sales price per unit of $320. If the company wants a return of 18% of its investment of $620,000, what should be the target cost? Arman Company has a product that cost $900, if it wants a return of 30% on sales, the selling price should be

Explanation / Answer

Cost price = $595 / (1 + 26%) = $472.2

2. Cost = $642

Selling price = 24% more than its cost = $642 / (1 - 24%) = $844.74

product cost = $844.74 -244.76 = $599.98

3. Return on investment = Net Profit/Cost of investment *100

Revenue = $147,000 * 12 =1,746,000

Variable costs = 0.64*$1,746,000 = $1,117,440

Fixed costs = 0.48 * $1,117,440 = $536,371

Net profit = Revenue

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