Final answer:
Monica's dress costs $140.80 wholesale with a 60% profit margin and retails at $211.20 after a 50% markup. The targeted market is consumers who value handcrafted clothing and are willing to pay for uniqueness and quality. Strategies to lower the retail price include reducing the profit margin, finding cheaper supplies, or improving efficiency.
Step-by-step explanation:
To calculate the wholesale price of the dress Monica is making, we first need to determine the cost of production. Monica spends $40 on supplies and 4 hours making the dress at $12.00 per hour for labor. This results in a labor cost of $48 (4 hours × $12.00). The total cost of production is therefore $40 + $48 = $88. To make a 60% profit on the wholesale price, we add 60% of $88 to the cost of production (0.60 × $88 = $52.80). The wholesale price of the dress is thus $88 + $52.80 = $140.80.
The retail price will be 50% higher than the wholesale price. Therefore, the retail price is 1.50 × $140.80 = $211.20. Monica's dress appears to be aiming for a market of consumers who value handcrafted clothing and are willing to pay a premium for such unique pieces. Depending on the law of supply and demand, as well as competition, Monica might have to adjust her prices. If the dress is unique, well-made, and fashion-forward, and if Monica targets the right consumer base that appreciates these qualities, customers might indeed be willing to buy the dress at this cost.
To lower the retail sale price, Monica could reduce her profit margin, find cheaper supplies, or become more efficient in production to reduce the number of hours required to make a dress. However, she should ensure that these changes do not compromise the quality of her dresses, as this may affect consumer demand.
Profile of Projected Buyer: Someone who values unique, handmade items and is willing to invest in higher-quality, boutique apparel.