Author Question: Spot-On wants to begin manufacturing and selling a new product, the Sporty Spot. Spot-On requires a ... (Read 10 times)

dusk108 · **on:** Feb 5, 2023

Question 1

Patch Work's product, Patch Supreme, sells for $62.00 and its variable cost is $44.60 while the cost of goods sold per unit is $42.80. What is Patch Work's markup percentage on variable cost and what is its gross margin percentage?
◦ 39%; 31%
◦ 28%; 31%
◦ 39%; 45%
◦ 28%; 45%

Question 2

Spot-On wants to begin manufacturing and selling a new product, the Sporty Spot. Spot-On requires a 25% gross margin on all new products. Marketing research indicates customers are interested in purchasing the Sporty Spot. If the production supervisor has agreed to produce the Sporty Spot at its target cost of $6.75 per unit, what is the price customers are willing to pay for the Sporty Spot (if necessary, round your answer)?
◦ $27.00
◦ $5.40
◦ $9.00
◦ $8.44

bainer89 · **Reply #1 on:** Feb 5, 2023

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