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Jones ltd manufactures b tools,The incremental cost of producing and selling a b-tool is £30, and the opportunity cost of producing and selling a b tool is £20.If Jones Ltd aims to make a 20% margin on sales, what is the minimum price that should be charged for a b-Tool?
There is no point in simply setting me test questions and expected me to answer 🙂
You must have an answer in the same book in which you found the question and so you should ask about whatever it is in the answer that you are not clear about – then I will help you.
From what you have typed, it would seem that the total cost of producing the tool is $50. Given that they want to make a margin of 20% on sales, then the cost must be 80% of the selling price and so the selling price must be the cost divided by 80%.
Have you watched all of my free lectures? The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well.
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