A Custom Tailor Wishes to Use Target Profit Pricing to Establish

question 355

Multiple Choice

A custom tailor wishes to use target profit pricing to establish a price for a custom designed business suit.Assume variable cost is $200 per suit, fixed cost is $44,000, and a target profit of $50,000 on a volume of 50 suits is desired.What price should be charged for a typical custom suit?

• A)$900.00
• B)$1,040.00
• C)$1,800.00
• D)$2,080.00
• E)$4,680.00

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