What will be our total cost per box of cereal

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Reference no: EM132291668

Increase in Minimum Wage We manufacture Rooty Tooty Frooty breakfast cereal at our factory in Toad Suck, AR. Our selling price is $2.20 per box, F.O.B. our shipping dock (our customers pay shipping expenses). Our gross profit margin is 40%. We pay our workers $8.25 per hour. Currently, the labor portion of our cost per box of cereal is $.215 (twenty one and one half cents). Beginning January 1, 2019, the minimum hourly wage will increase to $11.00. A. Calculate the labor cost per box of cereal after Jan I, 2019. Round answers to 3 places. B. After Jan 1, 2019, what will be our total cost per box of cereal, assuming all other non-labor costs remain the same? Round answer to 3 places. C. If we are to make the same 40% gross profit margin, what will be our new selling price, after Jan 1, 2019? Round answer up to closest penny. D. Based upon annual sales of 6 million boxes, how much added labor costs will we experience per year when comparing 2019 to 2018?

Reference no: EM132291668

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