12 Feb Pricing DecisionCaroline’s Candy Corner sells gour
Pricing DecisionCaroline’s Candy Corner sells gourmet chocolates. The company buys chocolates in bulk for $5 perpound plus 5% sales tax. Credit terms are 2/10, net 25; and the company always pays promptly totake advantage of the discount. The chocolates are shipped to Caroline FOB shipping point.Shipping costs are $0.05 per pound. When the chocolates arrive at the shop, Caroline’s Candyrepackages them into one-pound boxes labeled with the store name. Boxes cost $0.70 each. Thecompany pays its employees an hourly wage of $5.25 plus a commission of $0.10 per pound.Required1. What is the cost per one-pound box of chocolates?2. What price must Caroline’s Candy charge in order to have a 40% gross profit?3. Do you believe this is a sufficient gross profit for this kind of business? Explain. What othercosts might the company still incur?
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