Morrow Corporation Manufactures Part No

Essay

Morrow Corporation manufactures part no.67,which is used in the production of mountain bikes.Per-unit information about part no.67 follows.
A.Compute the current selling price of part no.67.
A.The current selling price is $36: ($14 + $6 + $7 + $3 = $30;$30 * 120% = $36).
B.If management desired to meet the prevailing market price and maintain the current rate of profit on sales,what must happen to the company's total manufacturing costs? By how much?
B.The company's markup is $6 ($36 - $30),which is 16.67% of the current $36 selling price ($6 / $36).To achieve a 16.67% markup on a $33 selling price,Morrow must reduce its costs by $2.50.