Julia's Motorcycles Inc. produces one model of motorcycle, called the Lightning. The Lightning has an MSRP of $2,500. The cost to produce one unit is $800. Their fixed costs are $2,000,000. You are responsible for deciding whether you should sell the Lightning via a retailer named Rugged Motors Inc. Rugged typically discounts its products 18% from the MSRP. They are asking for 55% distributor margin. How much does Rugged earn per unit? (show your work)

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 6EA: Reubens Deli currently makes rolls for deli sandwiches it produces. It uses 30,000 rolls annually in...
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Julia's Motorcycles Inc. produces one model of motorcycle, called the
Lightning. The Lightning has an MSRP of $2,500. The cost to produce one
unit is $800. Their fixed costs are $2,000,000. You are responsible for
deciding whether you should sell the Lightning via a retailer named Rugged
Motors Inc. Rugged typically discounts its products 18% from the MSRP.
They are asking for 55% distributor margin.
How much does Rugged earn per unit? (show your work)
Transcribed Image Text:Julia's Motorcycles Inc. produces one model of motorcycle, called the Lightning. The Lightning has an MSRP of $2,500. The cost to produce one unit is $800. Their fixed costs are $2,000,000. You are responsible for deciding whether you should sell the Lightning via a retailer named Rugged Motors Inc. Rugged typically discounts its products 18% from the MSRP. They are asking for 55% distributor margin. How much does Rugged earn per unit? (show your work)
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