Question - Company manufactures CDs and DVDs both assembled as 10 discs per pack. Predicted sales are 400,000 packs of CDs and 500,000 packs of DVDs. Predicted costs for the year are:
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Variable Costs
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Fixed Costs
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Materials
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300,000
|
600,000
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Other
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350,000
|
900,000
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Each product uses 50% of materials cost. 40% of other costs are assigned to CDs and 60% to DVDs. Desired annual profit is 200,000.
What price should be charged of management believes the DVDs sell 20% more than the CDs. Round to the nearest cent.
Price for CDs?
Price for DVDs?
What is total profit per product?
CDs?
DVDs?