Question

The abc corporation is considering introducing a new product which will require buying new equipment for a monthly payment of 5000 dollars. Each unit can be produced for 20.00. abc incurs a variable cost of 10 dollars per unit. Suppose that abc anticipates selling 100 units of the new product next month. Moreover they would like to realize a monthly profit of 5000. What should the selling price per unit be to realize this profit?

Answer 1

Anyone?

Answer 2

Lets first calculate the cost of producing units that is:
5000(monthly payment)+30*100(I have taken 30 as it will the maximum production cost)=8000.
So 8000 is the production cost.
We need $5000 as profit so we need to earn 8000+5000 from selling,which will be 13000.
As we need cost per unit,we will divide it with number of units..

Answer 3

Awsome.