Nelson Products is a priceminus?setter that uses the? cost-plus pricing approach. The products are specialty vacuum...
Nelson Products is a
priceminus?setter
that uses the? cost-plus pricing approach. The products are specialty vacuum tubes used in sound equipment. The CEO is certain that the company can produce and sell? 310,000 units per? year, due to the high demand for the product. Variable costs are? $2.40 per unit. Total fixed costs are? $960,000 per year. The CEO will receive stock options if? $200,000 of operating income for the year is reported. What sales price would allow the CEO to achieve the target if the? cost-plus pricing method is? used? (Round your answer to the nearest? cent.)
A.
?$4.85 per unit
B.
?$2.40 per unit
C.
?$3.74 per unit
D.
?$6.14 per unit
Homework Answers
Answer D , 6..14 per unit
variable cost = 310000 * 2.40
= 744000
fixed cost = 960000
total cost = 1704000
operative income = 200000
sales amount = 1904000
sales price per unit = 6.14 per unit
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Nelson Products is a
priceminus?setter
that uses the? cost-plus pricing approach. The products are
specialty vacuum...
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