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By admin Accounting Mcqs 6 Comments

A company is currently operating at 80% capacity level. The production under normal capacity level is 1,50,000 units. The variable cost per unit is ` 14 and the total fixed costs are ` 8,00,000. If the company wants to earn a profit of ` 4,00,000, then the price of the product per unit should be

A. 37.50
B. 38.25
C. 24.00
D. 35.00

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6 Comments

Warraich on 18/04/2021 5:31 AM
ActualProduction= 150,000*0.8=120,000
Variable Cost= 120,000*14= 1680,000
Total Cost= 1680,000+800,000= 2480,000
Desired Sales so that Profit of 400,000 can be generated = 2480,000+400,000= 2880,000
Per Unit Sale Price= 2880,000/120,000
24
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