Synergy Technologies produces wireless keyboards for computers. The costs associated with production of 10,000 units are variable costs of $80,000 and fixed costs of $30,000. The budgeted operating income at 10,000 units is $200,000. What is the expected unit selling price if Synergy uses a cost-plus method based on full cost?
A) $11.00
B) $20.00
C) $28.00
D) $31.00

Question

Quizplus · Accepted Answer

(Total Variable Cost + Total Fixed Cost) ÷ Units produced = Full Cost per Unit; ($80,000 + $30,000) ÷ 10,000 units = $11 per Unit; Profit per Unit = Operating Income ÷ Units Produced = $200,000 ÷ 10,000 units = $20 Profit per Unit; Unit Selling Price = Full Cost per Unit + Profit per Unit = $11 + $20 = $31.

Synergy Technologies Produces Wireless Keyboards for Computers