Glehar Technolgies sels a single product that has a variable cost of $9 per unit

Question

Glehar Technolgies sels a single product that has a variable cost of $9 per unit. Fixed costs are 55.000 per ear Demand for Global's product is sensitive to price. The CEO of Global projects anal sales volume will vary with the per-unit selling price, as follows Selling price $12 513 $15 Annual sales 40,000 units 30,000 units 20,000 units $19 10,000 units annual sales exceed 20,000 units, Global will need to purchase new equipment which will ncrease xed costs by $22,000 per year. Which selling price would generate the most operating income? $12 513 $15 $19 Both A and B are correct

Explanation / Answer

Units 40000 30000 20000 10000 Selling price 12 13 15 19 Sales revenue 480000 390000 300000 190000 Less Variable cost $9 360000 270000 180000 90000 Contribution margin 120000 120000 120000 100000 Less Fixed cost 77000 77000 55000 55000 Net operating income 43000 43000 65000 45000 So correct answer is C $15

Related Questions

Navigate

• Browse (All)
• Browse G
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.