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Last year, a manufacturer selling a product at $145 per unit had a net income of $82,500. The unit variable costs to produce the item are $90 per unit and their annual fixed costs are $165,000. This year, the fixed costs decreased by 10% and the variable costs decreased by 5%. If the same number of units as last year is produced and sold, what new selling price will result in the same profit as last year? Last year, a manufacturer selling a product at $145 per unit had a net income of $82,500. The unit variable costs to produce the item are $90 per unit and their annual fixed costs are $165,000. This year, the fixed costs decreased by 10% and the variable costs decreased by 5%. If the same number of units as last year is produced and sold, what new selling price will result in the same profit as last year?
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First lets calculate the contribution margin per unit Contribution margin per unit Selling price per ... View the full answer
Related Book For
Fundamentals of corporate finance
ISBN: 978-0470876442
2nd Edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
Posted Date:
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