Percival Company wishes to sell wooden beams to home builders. The current market price of the...
Percival Company wishes to sell wooden beams to home builders.
The current market price of the beams is $950, and Percival knows
it must accept the market price. Currently, the beams cost
Percival $809 to produce. The company wishes to make a profit
equal to 16% of the price. Which of the following strategies would
help Percival accomplish their objective?
A. Increase the volume of sales.
B. Reduce production costs by $11 per unit.
C. Increase the sales price to $961.
D. Increase the production cost by $22 per unit.
Homework Answers
B.reduce production costs by 11dollars per unit.
reduce the production cost to 11 dollars per unit so that it is possible to earn 16%profit on sale price.
950 * 16% = 152.
production cost = 950 - 12 = 798.
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