Chandler Packaged Treats (CPT) sells a specialty pet food to pet stores. CPT management prides itself...

 

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Chandler Packaged Treats (CPT) sells a specialty pet food to pet stores. CPT management prides itself on its scientific management methods. Applying those methods, the controller estimates the following monthly costs based on 6,000 units (produced and sold): Total Annual Costs (6,000 units) Required Direct material Direct labor Manufacturing overhead $108,000 50,000 112,000 Selling, general, and administrative 90,000 Total $360,000 a. Compute CPT's unit selling price that will yield a profit of $120,000, given sales of 6,000 units. b. What dollar sales does CPT need to achieve to generate a 15 percent profit on sales, assuming variable costs per unit are 55 percent of the selling price per unit and fixed costs are $158,100. c. Management believes that a selling price of $85 per unit is reasonable given current market conditions. How many units must CPT sell to generate the revenues (dollar sales) determined in requirement (b)? Chandler Packaged Treats (CPT) sells a specialty pet food to pet stores. CPT management prides itself on its scientific management methods. Applying those methods, the controller estimates the following monthly costs based on 6,000 units (produced and sold): Total Annual Costs (6,000 units) Required Direct material Direct labor Manufacturing overhead $108,000 50,000 112,000 Selling, general, and administrative 90,000 Total $360,000 a. Compute CPT's unit selling price that will yield a profit of $120,000, given sales of 6,000 units. b. What dollar sales does CPT need to achieve to generate a 15 percent profit on sales, assuming variable costs per unit are 55 percent of the selling price per unit and fixed costs are $158,100. c. Management believes that a selling price of $85 per unit is reasonable given current market conditions. How many units must CPT sell to generate the revenues (dollar sales) determined in requirement (b)?