Using the variable cost concept,determine the selling price for 30,000 units using the following data:
Variable cost per unit $15.00
Total fixed costs $90,000
Desired profit $150,000
A) $10
B) $15
C) $8
D) $23

Question

Using the variable cost concept,determine the selling price for 30,000 units using the following data: ​
Variable cost per unit $15.00
Total fixed costs $90,000
Desired profit $150,000
A) $10
B) $15
C) $8
D) $23

Quizplus · Accepted Answer

First, we need to calculate the total cost for producing 30,000 units:
Total Cost = Variable Cost per Unit * Number of Units + Total Fixed Costs
Total Cost = $15.00 * 30,000 + $90,000
Total Cost = $540,000

To determine the selling price, we need to add the desired profit to the total cost and divide it by the number of units:
Selling Price = (Total Cost + Desired Profit) / Number of Units
Selling Price = ($540,000 + $150,000) / 30,000
Selling Price = $690,000 / 30,000
Selling Price = $23.00

Therefore, the selling price for 30,000 units using the variable cost concept is $23.00.

Using the Variable Cost Concept,determine the Selling Price for 30,000