Jack sells sausages by the pound following his family recipe. It costs him $0.99 to make a pound of sausage. His other operating costs are $4478.70 each month. How much should he charge per pound if he wants to earn a 25% profit each month after expenses and estimates that he will both make and sell 1850 pounds of sausage per month? Jack should charge /lb. Rounded to the nearest hundredth (cents)
To calculate how much Jack should charge per pound, we first need to determine his total costs.
Cost to make 1850 pounds of sausage: $0.99 * 1850 = $1831.50
Total costs (including operating costs): $1831.50 + $4478.70 = $6309.20
To earn a 25% profit on his total costs, Jack needs to markup his sausages by 25%. This means his selling price should be 125% of his total costs.
Selling price per pound = $6309.20 * 1.25 / 1850
Selling price per pound ≈ $4.26
Therefore, Jack should charge $4.26 per pound of sausages to earn a 25% profit each month after expenses and estimates.