Sparkle this! is an online jewelry store. the owner, diamond joe, maintains a 41% target margin at all times. they are considering adding ruby heart pendants to their product line for valentine's day. the cost from their supplier is $38. joe estimates they can sell 56 pendants for valentine's day at the price based on their usual target margin.
what would be the appropriate price to achieve their usual target margin?
what would be the total contribution margin for the pendants at the price and volume on valentine's day that joe has estimated?
if joe decided instead to run a special sale on the pendants at a $5 discount what would be the new margin per unit in dollars ($)?
how many pendants must they sell with a $5 discount to equal the total contribution margin at the price with their normal target margin?