A felt-tip pen manufacturer is forecasted to sell 31000 pens next month. Their fixed costs are...

A felt-tip pen manufacturer is forecasted to sell 31000 pens next month. Their fixed costs are $23400 per month and variable costs are $0.35 per pen.

Management wants to generate $12000 in profits next month. Assuming that the demand is met, what must the selling price be?

Your Answer:

Expert Solution

Sales - Variable costs - Fixed costs = Profit

(31,000 * Selling price) - (31,000 * $0.35) - $23,400 = $12,000

31,000 * Selling price = $46,250

Selling price = $1.49 (rounded to 2 decimal places)

ekkarill92 answered 2 years ago

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