Use the following information for questions
Brislin Products has a new product going on the market next year. The following data are projections for production and sales: $\begin{array}{ll}
\text { Variable costs } & \$ 250,000 \
\text { Fixed costs } & \$ 450,000 \
\text { Rol } & 14 \% \
\text { Investment } & \$ 2,000,000 \
\text { Sales } & 200,000 \text { units }
\end{array}$
-What is the target selling price per unit?
A) $4.90
B) $3.50
C) $2.65
D) $3.65

Question

Use the following information for questions 
Brislin Products has a new product going on the market next year. The following data are projections for production and sales: $\begin{array}{ll}
\text { Variable costs } & \$ 250,000 \
\text { Fixed costs } & \$ 450,000 \
\text { Rol } & 14 \% \
\text { Investment } & \$ 2,000,000 \
\text { Sales } & 200,000 \text { units }
\end{array}$
-What is the target selling price per unit?
A) $4.90
B) $3.50
C) $2.65
D) $3.65

Quizplus · Accepted Answer

To find the target selling price per unit, we first calculate the total required revenue to achieve the desired Return on Investment (ROI). The ROI is 14% of the investment, which is 14% of $2,000,000 = $280,000. The total costs (variable + fixed) are $250,000 + $450,000 = $700,000. Therefore, the total required revenue is $700,000 (total costs) + $280,000 (desired ROI) = $980,000. Dividing this by the number of units (200,000) gives the target selling price per unit: $980,000 / 200,000 = $4.90.

Use the Following Information for Questions Brislin Products Has

Use the Following Information for Questions
Brislin Products Has