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Question
A company expects to produce and sell a single product. Management desires a 14% return on assets of $725,000. The following additional company information is available:
| Variable costs (per unit) | |
| Production costs | $58 |
| Nonproduction costs | $11 |
| Fixed costs (in total) | |
| Overhead | $179,872 |
| Nonproduction | $49,984 |
Required:
Compute selling price per unit given that markup percentage equals desired profit divided by total costs under the following independent assumptions.
a. The company produced and sold 17,600 units
b. The company produced and sold 28,732 units
Answer
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