Dino\'s, Inc., makes a variety of T-shirts with logos. The company has discovere

Question

Dino's, Inc., makes a variety of T-shirts with logos. The company has discovered a new market for sweatshirts with logos. Market research indicates that a sweatshirt like this would sell well in the market priced at $25.00 each. Dino's desires an operating profit of 25 percent of costs Required: What is the highest acceptable manufacturing cost for which Dino's would be willing to produce the sweatshirt? (Round your answer to 2 decimal places.) References eBook & Resources Exercise Diffcuty 2 Medium SWORD: Study341

Explanation / Answer

Lets assume manufacturing cost to be "x"

x+25%x=25

1.25x=25

x=$ 20= maximum manufacturing cost at which he will be ready to produce sweatshirt.

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