Question: Net sales for the year were $ 1 , 2 0 0 , 0 0 0 and cost of goods sold was $ 8 7

Net sales for the year were $

1, 200, 000

and cost of goods sold was $

876, 000

for the company

s existing products. A new product is presently under development and has an expected selling price of not more than $

71

per unit in order to remain competitive with similar products in the marketplace.

Required:

.

Calculate gross profit and the gross profit ratio for the year.

.

What is the maximum cost per unit that can be incurred to manufacture the new product so that the product can be priced competitively and will not result in a reduction to the company

s gross profit ratio?

(

Do not round intermediate calculations. Round your final answer to

2

decimal places.

)

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