Mesa Cheese Company has developed a new cheese slicer called Slim Slicer. The co
ID: 2555840 • Letter: M
Question
Mesa Cheese Company has developed a new cheese slicer called Slim Slicer. The company plans to sell this slicer through its catalog, which it issues monthly. Given market research, Mesa believes that it can charge $23 for the Slim Slicer. Prototypes of the Slim Slicer, however, are costing $29. By using cheaper materials and gaining efficiencies in mass production, Mesa believes it can reduce Slim Slicer's cost substantially. Mesa wishes to earn a return of 33% of the selling price.
(a)
Compute the target cost for the Slim Slicer. (Round answer to 2 decimal places, e.g. 10.50.)
Explanation / Answer
(a)
Target Sales Price $23 Less: Gross Mark up($23 * 33%) $7.59 Target Cost $15.41