he Groovy Movie Chains has invested in Italian snack bars for their stores, wher

Question

he Groovy Movie Chains has invested in Italian snack bars for their stores, where individual pizzas are prepared and sold. The investment cost the company $47,000. The company expects a sales volume for the new product to be 12,000 pizzas a year. Variable materials, preparation, and marketing costs are expected to be $1.60 a unit and fixed costs are estimated at $16,200 a year. Based on a desired 12% ROI, what should Groovy Movies charge as the selling price per pizza? (Round your final answer to 2 decimal places.) $3.42 why this 3.42 I got 4.42 per my calculations

Explanation / Answer

3.42

why this 3.42

because interest on investment is also a cost.and it would be included in total cost.

Cost Sheet Groovy Movie Chains Particulars total Units Variable cost per unit Total variable cost 12000 1.6 19200 Fixed cost 16200 Interest cost( 47000*12%) 5640 Total cost 41040 total no of units produced(12000) 12000 Cost per unit

3.42

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.