Zarqa Manufacturing Company started its business in January 2019 producing and selling only Product (B). The company's
Question:
Zarqa Manufacturing Company started its business in January 2019 producing and selling only Product (B). The company's cost accounting manager has set the following targets related to Product (B):
Monthly Fixed Costs: JOD 750,000
Variable Cost: JOD 60 per unit
Monthly Production: 20,000 units
Target Selling Price: JOD 150 per unit
Monthly Target Profit: JOD100,000
The Chief Financial Officer (CEO) of the company is very concerned about the target selling price of the product; he thinks that the price might be high as the number of competitors is high and the market is highly competitive. Therefore, the CEO asked you to estimate the lowest selling price that the company can sell all monthly production and achieve the target profit set by the cost accounting manager.
Expert Answer:
Given data Monthly Fixed Costs JOD 750000 Variable Cost per Unit JOD 60 Monthly Production 20000 uni... View the full answer
