Flyer Company sells a product in a competitive marketplace. Market analysis indicates that its product would probably sell at $48 per unit. Flyer management desires a 12.5% profit margin on sales. Their current full cost for the product is $44 per unit.
If the company cannot cut costs any lower than they already are, what would the profit margin on sales be to meet the market selling price?
A) 9.3%
B) 7.3%
C) 10.3%
D) 8.3%

Question

Flyer Company sells a product in a competitive marketplace.  Market analysis indicates that its product would probably sell at $48 per unit.  Flyer management desires a 12.5% profit margin on sales.  Their current full cost for the product is $44 per unit.
If the company cannot cut costs any lower than they already are, what would the profit margin on sales be to meet the market selling price?
A) 9.3%
B) 7.3%
C) 10.3%
D) 8.3%

Quizplus · Accepted Answer

The Answer of Flyer Company sells a product in a competitive marketplace.  Market analysis indicates that its product would probably sell at $48 per unit.  Flyer management desires a 12.5% profit margin on sales.  Their current full cost for the product is $44 per unit.
If the company cannot cut costs any lower than they already are, what would the profit margin on sales be to meet the market selling price?
A) 9.3%
B) 7.3%
C) 10.3%
D) 8.3%

Flyer Company Sells a Product in a Competitive Marketplace