Question

Confectioners, a chain of candy stores, purchases its candy in bulk from its suppliers. For a recent shipment, the company paid $4100 and received 6100 pieces of candy that are allocated among three groups. Group 1 consists of 1810 pieces that are expected to sell for $0.15 each. Group 2 consists of 4120 pieces that are expected to sell for $0.46 each. Group 3 consists of 170 pieces that are expected to sell for $0.82 each. Using the relative sales value method, what is the cost per item in Group 2? $0.82 $0.27 $0.67. $1.46.

Answer 1

Calculate cost per item in Group 2

Group	relative sales value
1	1810*.15 = 271.50
2	4120*.46 = 1895.20
3	170*.82 = 139.40
Total	2306.10

Cost for Group 2 = 4100/2306.10*1895.20 = 3369

Cost per item = 3369/4120 = 0.82

So answer is a) $0.82