The marketing manager of Griffin Corporation has determined that a market exists for a telephone with a sales price of $36 per unit. The production manager estimates the annual fixed costs of producing between 40,000 and 80,000 telephones would be $450,000.
Required
Assume that Griffin desires to earn a $150,000 profit from the phone sales. How much can Griffin afford to spend on variable cost per unit if production and sales equal 50,000 phones?