Question

Bob Barker's dog biscuit company sells dog biscuits. The ingredients for the biscuits cost $1.52 per box and the packaging for each box costs $0.25.

Fixed costs are $35,000

The current sales level is 20,000 boxes per month.

Bob Barker's investors want to ensure profits of at least $129,000 per month.

What should Bob Barker charge for each box of dog biscuits?

(Round your answer to the nearest penny)

Answer 1

Bob Barker should charge $ 10 for each box

Calculations table as per following:

Particualrs	Per Unit Cost	Current Sales Level	Amount in $
Material Cost	1.52	20000	30,400
Packaging Cost	0.25	20000	5,000
Variable cost			35,400
Fixed Cost			35,000
Total Cost for 20000 Boxes			70,400
Expected Monthly Profit			129,000
Expected Sales Value			199,400
Current Sales Level			20,000
Selling Price Per Box			10