Abc, a chain of candy stores, purchases its candy in bulk from its suppliers. for a recent shipment, the company paid $1,500 and received 8,500 pieces of candy that are allocated among three groups. group 1 consists of 2,500 pieces that are expected to sell for $0.15 each. group 2 consists of 5,500 pieces that are expected to sell for $0.36 each. group 3 consists of 500 pieces that are expected to sell for $0.72 each. using the relative sales value method, what is the cost per item in group 2? a. $0.19.b. $0.30.c. $0.18.d. $0.20.

Option (d) is correct.

Explanation:

Amount paid for candy = $1,500

Items received = 8,500 pieces of candy

Group 1 =  2,500 pieces

Selling price = $0.15 each

sale value = pieces sold × Selling price

                 = 2,500 ×  $0.15 each

                 = $375

Group 2 = 5,500 pieces

Selling price = $0.36 each

sale value = pieces sold × Selling price

                 = 5,500 ×  $0.36 each

                 = $1,980

Group 3 = 500 pieces

Selling price = $0.72 each

sale value = pieces sold × Selling price

                 = 500 ×  $0.72 each

                 = $360

Total sale value = $375 + $1,980 + $360

                           = $2,715

= 72.92%

Proportion of cost for Group 2 = cost × Percentage of sale in Group 2

                                                   = $1,500 × 72.92%

                                                   = $1,093.8

= $0.1988

= $0.20(approx)

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