Problem Sparkle This! is an online jewelrystore. The owner, Joe Diamond, maintains a 36% 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 $31. Joe estimates they can sell 42 pendants for Valentine's Day at the price based on their usual target margin. Question 4 How many pendants must they sell with a $5 discount to equal the Total Contribution Margin at the price with their normal target margin?
Added by Brett E.
Step 1
The target margin is 36%, which means the cost represents 64% of the selling price. Let \( C \) be the cost and \( P \) be the selling price. We can express this relationship as: \[ C = P \times (1 - \text{Target Margin}) \] Substituting the values: \[ Show more…
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