Answered: The following is Cullumber Company’s…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 2MC: The following information is available for Cooke Company for the current year: The gross margin is...

See similar textbooks

Related questions

Question

The following is Cullumber Company’s income statement for the past year.

Sales revenue		$336,000
Cost of goods sold		134,400
Gross margin		201,600
Operating expenses		145,600
Operating income		$56,000

If the company wants to sell a new product that costs $49 wholesale while keeping the same markup structure, what will be the price of the new product? (Use the gross margin percentage and round final answer to 2 decimal places, e.g. 25,124.25.)

Price of the new product

$enter the price of the new product in dollars rounded to 2 decimal places

The following is Cullumber Company's income statement for the past year.
Sales revenue
$336,000
Cost of goods sold
134,400
Gross margin
201,600
Operating expenses
145,600
Operating income
$56,000

If the company wants to sell a new product that costs $49 wholesale while keeping the same markup structure, what will be the
price of the new product? (Use the gross margin percentage and round final answer to 2 decimal places, e.g. 25,124.25.)
Price of the new product
%24

Expert Solution

Working:

Gross margin % = (Gross margin / Sales) x 100

= (201,600/336,000)*100

= 60%

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions