The chief engineer at Wilson Electronics has proposed the production of a digipad to be sold at a 30 percent markup.Management estimates that the fixed costs per year will be $150,000 and the variable cost of the digipad will be $28 per unit.If Wilson sells 30,000 digipads, how much is the selling price of each digipad?
A)$42.90
B)$33.00
C)$36.40
D)$9.90

Question

Quizplus · Accepted Answer

The selling price per digipad can be calculated by first determining the cost price per unit, which includes the variable cost of $28. Adding a 30% markup to the cost price gives the selling price: $28 + ($28 * 0.30) = $28 + $8.40 = $36.40. However, the fixed costs and the number of units sold are not directly relevant to calculating the selling price per unit in this context, indicating a mistake in my initial calculation. The correct selling price, considering a 30% markup on the $28 cost, is indeed $36.40, but due to a misunderstanding in my explanation, the correct choice based on the calculation provided should have been $36.40, aligning with a 30% markup on the variable cost. However, given the options and the context provided, there seems to be a discrepancy in the calculation or the options presented.

The Chief Engineer at Wilson Electronics Has Proposed the Production