In 2012, every dollar (100¢) spent on grocery items was broken down as follows: Labor = 38.5¢ Farm value of food products = 19.5¢ Advertising and packaging = 12¢ Transportation = 7.5¢ Rent and insurance = 7¢ Taxes = 6¢ Depreciation and repairs = 5¢ Profit = 4.5¢Assume the transportation cost increases by 10% per year and the labor cost increases by 4% per year for five years, with all other costs remainingconstant. Determine the percent profit in the years 2012 and 2017, assuming the profit amount remains at 4.5¢.
In 2012, every dollar (100¢) spent on grocery items was broken down as follows: Labor = 38.5¢ Farm value of food products = 19.5¢ Advertising and packaging = 12¢ Transportation = 7.5¢ Rent and insurance = 7¢ Taxes = 6¢ Depreciation and repairs = 5¢ Profit = 4.5¢Assume the transportation cost increases by 10% per year and the labor cost increases by 4% per year for five years, with all other costs remainingconstant. Determine the percent profit in the years 2012 and 2017, assuming the profit amount remains at 4.5¢.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 35P
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In 2012, every dollar (100¢) spent on grocery items was broken down as follows:
Labor = 38.5¢
Farm value of food products = 19.5¢
Advertising and packaging = 12¢
Transportation = 7.5¢
Rent and insurance = 7¢
Taxes = 6¢
Profit = 4.5¢
Assume the transportation cost increases by 10% per year and the labor cost increases by 4% per year for five years, with all other costs remaining
constant. Determine the percent profit in the years 2012 and 2017, assuming the profit amount remains at 4.5¢.
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