Question: Management is considering adding a new product that will require an additional $20,000 per month of fixed expenses and will have variable expenses of $5

Management is considering adding a new product that will require an additional $20,000 per month of fixed expenses and will have variable expenses of $5 per unit.

Calculate the selling price that will be required for the new product if it is to have a contribution margin ratio equal to 20%

a. 25

b. 6.25

c. 4.17

d. 5

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