41. A manufacturing company sells one product with a variable cost of $22 per un

Question

41.       A manufacturing company sells one product with a variable cost of $22 per unit. The company knows that the price charged will affect demand. Fixed costs are $450,000 and the following chart represents the estimated demand at various price levels.

                     Units Sold                             Price

                        45,000                                 $35

                        60,000                                 $33

                        75,000                                 $31

                        90,000                                 $27

If the company recorded a profit of $ 225,000 what price was charged?

A.        $35

B.        $33

C.        $31

D.        $27

Explanation / Answer

Answer:C . $31

=Fixed cost+Desirec profit/(Selling price-variable cost)

=(450000+225000)/(31-22)

=75000 units

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