A company manufacturing toys has a fixed cost of $100,000. Variable cost is 6 per toy.Selling price is $10 per toy. Company target profit is $120,000.
a. How many toys should be sold to reach the target profit?
b. the company found that it variable cost is going to increase by $2 and plans to raise its selling price by $3 and reduced fixed cost by $20,000. How many more (less) toys have to be sold at the new price to reach the target profit of $120,000?
c. What is the markup (profit margin %) at this new sales volume? what is the markup (profit margin %0 on total cost?