A company is operating at 80% of capacity, where normal capacity output is 1,50,000 units. Variable cost is 14 per unit, total fixed costs are 8,00,000 and the target profit is 4,00,000. What should the selling price per unit be?
Correct answer C. 24.00
Explanation
Output is 1,20,000 units. Total cost plus profit = 16,80,000 + 8,00,000 + 4,00,000 = 28,80,000, which divided by 1,20,000 units gives 24 per unit.
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